Instructions

Please select the best answer for each of the following questions. Unless otherwise stated, the questions relate to the current tax year. You will be permitted to take the quiz twice with the highest score being recorded as your grade.

Question 3 20 pts Sam, age 79 purchases an annuity that will pay him $1,000 per month for the remainder of his life, beginning on January 1. His basis is the annuity cost of $60,000. How much gross income does Sam have in the annuity this year. The IRS tables provide for a life expectancy of twenty years for a 65 year-old. O $3,000 O $3333 $12,000 $6,000