In 1998, Carol Purchased a Single Life Annuity for $150,000

question 44

Multiple Choice

In 1998, Carol purchased a single life annuity for $150,000 that would pay her $15,000 per year for life beginning in 2011.Carol's life expectancy from 2011 forward on which the payments were based was 20 years.

• A)How much would Carol include in income if she is still receiving payments in 2031?
• B)If Carol dies in 2019 after receiving that year's payment, what is the unrecovered investment remaining?
• C)How is the unrecovered investment treated for tax purposes?

---

Definitions:

Plaques

Deposits of a protein fragment called beta-amyloid that build up in the spaces between nerve cells, often found in the brains of individuals with Alzheimer's disease.

Tangles

Abnormal accumulations of tau protein inside brain cells, commonly associated with Alzheimer’s disease and other neurodegenerative conditions.

Vascular Disease

A class of diseases of the blood vessels (the arteries and veins), which can limit blood flow and lead to significant health problems.

Neurocognitive Disorder

A category of mental health disorders that primarily affect cognitive abilities including memory, learning, and understanding.