Jason receives semiannual annuity checks of $4,500. Jason purchased the annuity five years ago for $110,000 when

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Jason receives semiannual annuity checks of $4,500. Jason purchased the annuity five years ago for $110,000 when his expected return under the annuity was $200,000.

How much of Jason’s total annual payment is a nontaxable return of capital?

a. $9,000

b. $4,950

c. $4,050

d. Zero AppendixLO1

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Taxation For Decision Makers 2008

ISBN: 9780324654110

2nd Edition

Authors: Shirley Dennis-Escoffier, Karen A. Fortin

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