Refer to the facts in the preceding problem Assume that
Refer to the facts in the preceding problem. Assume that on January 1, 2025, Mr. F’s unrecovered investment in the annuity is $1,875.
a. How much of his total 2025 annuity payments ($15,600) are taxable?
b. Assume that he dies in February after receiving only one $1,300 payment. What are the tax consequences on his final Form 1040?
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