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:

Echolalia

The automatic and involuntary repetition of words or phrases just spoken by others, often a symptom of autism spectrum disorder or other conditions.

Broca's Area

A region in the frontal lobe of the dominant hemisphere (usually the left) of the brain with functions linked to speech production.

Aphasia

A disruption in the ability to understand or produce language.

Overextensions

A language development phenomenon where children apply a word in a broader context than is appropriate, showing their understanding of language categories.