Charles pays $120,000 for a single-life annuity that pays him $11,000 a year for life. Treasury Department

Question:

Charles pays $120,000 for a single-life that pays him $11,000 a year for life. Treasury Department tables estimate his remaining life to be 15 years.
a. How much of each $11,000 payment must Charles report as gross income?
b. If Charles dies after receiving payments totaling $77,000 over seven years, what happens to the unrecovered cost? 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,...