Julia,age 57,purchases an Annuity for $33,600

question 22

Multiple Choice

Julia,age 57,purchases an annuity for $33,600.Julia will receive $400 per month for the rest of her life.The expected return multiple is 20.0.At age 88,the amount that Julia may exclude from income is

• A)$0.
• B)$1,680.
• C)$3,120.
• D)$4,800.

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Definitions:

Taxes

Obligatory charges imposed by the government on the earnings of employees, profits of companies, or included in the prices of various goods, services, and transactions.

Income Tax

A tax levied by governments on individuals or entities based on their income or profits.

Taxable Income

The amount of income subject to taxes, after deductions and exemptions, according to the tax laws governing the taxpayer.

Tax Rate

The percentage at which an individual or corporation is taxed by the government on income, property, or sales.