Generally speaking, other than qualified plans (i.e., pension plans that are funded with after tax dollars), most investment vehicles are funded by U.S. Citizens with after tax dollars. One such vehicle is a tax deferred annuity. Assume that on August 15th, you and your spouse were fortunate enough to bring twin baby boys into the world. To ensure that you are able to offer them any higher education option they have earned, you and your spouse arrange with a financial services firm for a tax deferred annuity that would require you to invest $15,000 per year (total not per child) for the first 18 years of your daughters lives and would begin paying in year 19, 5 annual payments of $70,000 each. How much of each payment would be included in you and your spouse’s tax return as investment income from that annuity each year?