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:

Scolded

Being reprimanded or criticized harshly, often in a way that induces feelings of guilt or shame.

Cognitive Restructuring

A psychological technique designed to identify and challenge negative and irrational thoughts, and to replace them with more positive and realistic ones.

Hallucination Reinterpretation

A cognitive therapy technique that helps individuals understand and reinterpret their hallucinatory experiences to reduce distress or disability.

Attention

The mental process of focusing consciousness or awareness onto a specific object, event, or activity, enabling effective processing of information.