Hamden Is Entitled to Receive Monthly Payments of $6,000 Over

question 62

Multiple Choice

Hamden is entitled to receive monthly payments of $6,000 over his life from his employer's qualified pension plan. The payments begin January 1, 2015. He contributed $286,000 to the plan prior to his retirement at age 62. Using the simplified method, what amount of the payments will be excluded from Hamden's taxable income for 2015?

• A) $0.
• B) $13,200.
• C) $58,800.
• D)$72,000.

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Definitions:

Rights-On Period

A designated timeframe during which shareholders have the right to purchase additional shares at a predetermined price before the offering is open to the public.

Subscription Price

The cost that a customer pays, often on a regular basis, to receive a product or service.

Common Share Price

The price at which a corporation's common shares are bought and sold on the stock market.

Rights-On Period

A defined timeframe during which shareholders can purchase additional shares before the public.