Gabagool purchased an annuity for $24,000 in 2022. Under the contract, he will receive $300 each month for the rest of his life. According to the actuarial estimates, Gabagool will live to receive 96 payments and will receive a 3% return on his original investment.

Choose from one of the following below:

a.If Gabagool collects $3,000 in 2022, his gross income is $630 (0.03 $21,000).

b.Gabagool has no gross income until he has collected $24,000.

c.If Gabagool lives to collect more than 96 payments, all of the amounts collected after the 96th payment must be included in taxable income.

d If Gabgool lives to collect only 60 payments before his death, he will report a $6,000 loss from the annuity [$24,000 (60 $300) = $6,000] on his final return.