Ned Norton, a calendar year taxpayer, purchased an annuity contract which pays him $54 per month beginning

Question:

Ned Norton, a calendar year taxpayer, purchased an annuity contract which pays him $54 per month beginning June 1, 2015. This annuity cost him $2,400, and it has an expected return of $7,200.

How much of this annuity is includible in gross income for the 2015 calendar year?

Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,... Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...