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Mike purchased an annuity contract at the beginning of 2005 for $151,200. The contract specified that he and his wife would receive $1,000 per
Mike purchased an annuity contract at the beginning of 2005 for $151,200. The contract specified that he and his wife would receive $1,000 per month for life. Mike receives his first payment on January 1, 2021, when he is 60 years old and his wife is 56 years old. What amount of gross income should Mike and his wife report on their 2021 income tax return from this annuity contract? (please show your steps to the answer)
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