Alvin and Lindsay Are Husband and Wife and Have Always

question 187

Essay

Alvin and Lindsay are husband and wife and have always lived in New York,a common law state.In 1990 and using separate funds,they bought an annuity from an insurance company-the purchase price was furnished 1/3 by Alvin and 2/3 by Lindsay.Under the terms of the contract,Alvin is to receive $20,000 per month for life when he reaches age 65. If Lindsay survives Alvin,she is to receive $15,000 per month for her life.Alvin dies first,at which time the value of Lindsay's survivorship annuity is $1,200,000.As to this annuity,how much (if any)is included in Alvin's gross estate?

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Definitions:

Net Operating Income

A financial calculation that represents a company's total income generated from its operations, minus its operating expenses, excluding taxes and interest.

Fixed Expenses

Costs that remain constant for a given period regardless of the level of production or sales, such as rent or salaries.

Variable Expenses

Expenses that change in proportion to the activity of a business.

Financial Advantage

A benefit gained in financial terms, which can result from factors such as cost savings, investment returns, or other monetary gains.