If Bryan and Sarah die simultaneously in a common car accident, answer the following What is the amount of life insurance proceeds paid Who will receive those benefits Bryans father, Josiah, has a deferred fixed annuity purchased in 2004 for $140,000 It is now worth $272,700 and has an interest rate of 4 If Josiah withdraws $50,000, how is this distribution taxed Are any other charges assessed Assume Josiah annuitizes the annuity over a 15 year time frame with a 4 interest rate Answer these questions How big will each annual payment be What is the taxable portion of each payment (use the exclusion ratio and original basis in the annuity when purchased in 2004 You will need to use the TVM keys on your financial calculator Assume payments begin immediately) If Josiah chooses to exchange the annuity into a new annuity, explain the tax consequences of this transaction, any surrender charges on the old policy and possible surrender charges on the new policy

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Posted on Oct 05, 2024

If Bryan and Sarah die simultaneously in a common car accident, answer the following:
1. What is the amount of life insurance proceeds paid?
2. Who will receive those benefits?
Bryans father, Josiah, has a deferred fixed annuity purchased in 2004 for $140,000. It is now worth $272,700 and has an interest rate of 4%. If Josiah withdraws $50,000, how is this distribution taxed? Are any other charges assessed?
Assume Josiah annuitizes the annuity over a 15-year time frame with a 4% interest rate. Answer these questions:
1. How big will each annual payment be?
2. What is the taxable portion of each payment (use the exclusion ratio and original basis in the annuity when purchased in 2004. You will need to use the TVM keys on your financial calculator. Assume payments begin immediately).
If Josiah chooses to exchange the annuity into a new annuity, explain the tax consequences of this transaction, any surrender charges on the old policy and possible surrender charges on the new policy.