Jerry Purchased an Annuity Contract at the Beginning of 2003

question 126

Multiple Choice

Jerry purchased an annuity contract at the beginning of 2003 for $144,000.The contract specified that he and his wife would receive $1,000 per month for life.Jerry receives his first payment on February 1,2017 when he is 59 years old and his wife is 56 years old.What amount of gross income should Jerry and his wife report on their 2017 income tax return from this annuity contract?

• A)$-0-
• B)$4,400
• C)$6,600
• D)$11,000

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Definitions:

Roanoke Colony

The Roanoke Colony, also known as the Lost Colony, was an early attempt by the English to establish a settlement in North America on Roanoke Island in what is now North Carolina, which mysteriously disappeared.

Freeman Status

Historically, the designation of individuals in society who possessed full citizenship rights, often distinguished from slaves or serfs.

Landowning Church Members

Members of a church community who also own land, historically signifying a higher social and economic status within that community.

Indentured Servants

Individuals who agreed to work for a certain number of years in exchange for passage to the New World, shelter, and sustenance, essentially a labor system used in colonial America.