This Year Larry Received the First Payment from an Annuity

question 133

Essay

This year Larry received the first payment from an annuity that promises to pay him $3,000 per month for the rest of his life. The IRS tables indicate that given Larry's age, he should expect to receive 310 monthly payments. The cost of the annuity to Larry was $620,000. How much of the first $3,000 payment should Larry include in gross income?

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Definitions:

Learning Perspective

A theoretical approach in psychology that emphasizes the role of environmental influences on one's behavior, including the processes of learning through reinforcement and observation.

Disordered Behavior

Actions or patterns of actions that are considered abnormal or outside societal norms, often indicative of a psychological condition.

Identical Processes

Processes that are exactly the same in every aspect, often used in scientific experiments to ensure replicability and reliability.

Somatoform Disorder

A mental disorder characterized by physical symptoms that have no apparent physical cause, indicating that psychological factors may be involved.