Mark a Calendar Year Taxpayer,purchased an Annuity for $50,000 in 2014.The

question 105

Multiple Choice

Mark a calendar year taxpayer,purchased an annuity for $50,000 in 2014.The annuity was to pay him $3,000 on the first day of each year,beginning in 2014,for the remainder of his life.Mark's life expectancy at the time he purchased the annuity was 20 years.In 2016 Mark developed a deadly disease,and doctors estimated that he would live for no more than 24 months.

• A)If Mark dies in 2017,a loss can be claimed on his final return for his unrecovered cost of the annuity.
• B)If Mark dies in 2017,his returns for the two previous years can be amended to allocate the entire cost of the annuity to the years in which he received payments and reported gross income.
• C)If Mark is still alive at the end of 2016,he is not required to recognize any gross income because of his terminal illness.
• D)If Mark is still alive in 2036,his recovery of capital for that year is $500.
• E)None of these.

---

Definitions:

Process Inadequacy

The state of a workflow or procedure's failure to meet necessary standards or desired outcomes effectively.

Reservation System

A software application used by various service providers to allow customers to reserve items or services in advance.

Small Failures

Minor setbacks or mistakes that, while not leading to significant harm, can provide valuable learning opportunities and insights for future success.

Successful Entrepreneur

An individual who successfully organizes and operates a business or businesses, often showing a high level of innovation and risk-taking ability.