Required Information The following information applies to the questions displayed below.) Larry purchased an annuity from an insurance company that promises to pay him $4,500 per month for the rest of his life. Larry paid $433,620 for the annuity. Lorry is in good health and is 72 years old. Larry received the first annuity payment of $4.500 this month. Use the expected number of payments in Exbibit 5-1 for this problem, a. How much of the first payment should Larry include in gross income? Amount to be included ! Required Information [The following information applies to the questions displayed below.) Larry purchased an annuity from an Insurance company that promises to pay him $4,500 per month for the rest of his life. Larry paid $433,620 for the annuity. Larry is in good health and is 72 years old. Larry received the first annuity payment of $4,500 this month. Use the expected number of payments in Exhibit 5.1 for this problem. b. If Larry lives more than 15 years after purchasing the annuity, how much of each additional payment should he include in gross Income? Amount to be included Larry purchased an annuity from an insurance company that promises to pay him $4,500 per month for the rest of his life. Larry paid $433,620 for the annuity. Lorry is in good health and is 72 years old. Larry received the first annuity payment of $4,500 this month. Use the expected number of payments in Exhibit 5.1 for this problem. c. What are the tax consequences if Larry dles just after he receives the 100th payment? Lonny and Shirley divorced in 2018 and do not live together. Shirley has custody of their child, Art, and Lanny pays Shirley $28,250 per year. All property was divided equally. a. How much should Shirley include in Income If Lonny's payments are mode in cash but will cease if Shirley dles or remarries? Amount to be included Lanriy and Shirley divorced in 2018 and do not live together. Shirley has custody of their child, Art, and Lanny pays Shirley $28,250 per year. All property was divided equally b. How much should Shirley include in income if $15,750 of Lanny's payments is designated as "nonalimony in the divorce decree? Anout to be included Lanny and Shirley divorced in 2018 and do not live together. Shirley has custody of their child, Art, and Lanny pays Shirley $28,250 per year. All property was divided equally, D. How much should Shirley include in income If $15,750 of Lanny's payments is designated as ronallmony" in the divorce decree? Amount to be included Lanny and Shirley divorced in 2018 and do not live together. Shirley has custody of their child, Art, and Lanny pays Shirley $28,250 per year. All property was divided equally. c. How much should Shirley include in income If Lanny's payments drop to $20,000 once Art reaches the age of 18? Amount to be included Jimmy hus follen on hard times recently. Last year he borrowed $345,000 and added an additional $ 79,000 of his own funds to purchase $424,000 of undeveloped real estate. This year the value of the real estate dropped dramatically, and Jimmy's lender agreed to reduce the loan amount to $324,700. For each of the following independent situations, indicate the amount Jimmy must include in gross income: (Leave no answer blank. Enter zero If applicable.) a. The real estate is worth $266,800 and Jimmy has no other assets or liabilities Scenario A Amount includible Jimmy has fallen on hard times recently. Last year he borrowed $345,000 and added an additional $79,000 of his own funds to purchase $424,000 of undeveloped real estate. This year the value of the real estate dropped dramatically, and Jimmy's lender agreed to reduce the loan amount to $324,700. For each of the following independent situations, indicate the amount Jimmy must include in gross income: (Leave no answer blank. Enter zero if applicable) b. The real estate is worth $330,250 and Jimmy hos no other assets or oblities. Scenario B Amount includible EXHIBIT 5-1 Table for Expected Return Multiple for Ordinary Single-Life Annuity Age at Annuity Starting Date Expected Return Multiple 68 17.6 69 16.8 16.0 70 71 15.3 14.6 72
