Which of the following is a true statement about the first payment received from a purchased annuity?

Multiple Choice

The payment is included in gross income.

A portion of the payment is a return of capital.

The payment can only be taxed in the year after the annuity was purchased.

The payment is not taxed until the annuity payments cease altogether.

All of these choices are correct.

Multiple Choice

$$0$ gain and $$0$ tax

$$500$ gain and $$75$ tax

$$500$ gain and $$175$ tax

$$1,200$ gain and $$180$ tax