James Bought an Annuity for $42,000 Several Years Ago

question 121

Multiple Choice

James bought an annuity for $42,000 several years ago. The annuity will pay him $250 per month from age 66 until he dies. During the current year, James turns 66 and received his first annuity payment. His life expectancy is 25 years.
I.If James receives more than 260 payments, all payments received after those are totally included in income.
II.James should include $50 of each payment in adjusted gross income.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Genetic Differences

Variations in the DNA sequences among individuals within a population.

Intelligence

The ability to learn from experience, solve problems, and use knowledge to adapt to new situations.

Partially Heritable

Traits or characteristics that are influenced by both genetic factors and environmental conditions.

Heritability Estimates

Quantitative measures of the extent to which genetic factors contribute to individual differences in a trait or behavior within a given population.