question 6

Larry purchased an annuity from an insurance company that promises to pay him $12,000 per month for the rest of his life. Larry pald $1,576,800 for the annuity. Larry is in good health and is 72 years old. Larry received the flirst annuity payment of $12,000 this month. Use the expected number of payments in Exhlbit 5.1 for this problem. Required: a. How much of the first payment should Larry include in gross income? b. If Larry lives more than 15 years after starting the annuity, how much of each additional payment should he include in gross income? c. What are the tax consequences if Larry dies just after he recelves the 100 th poyment? Complete this question by entering your answers in the tabs below. How much of the first payment shouid Larry include in gross income