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Question

In Year $1,$ Ted purchased an annuity for $$60,000.$ The annuity is to pay him $$1,500$ per month for the rest of his life. His life expectancy is $120$ months. Which of the following is true?

A$.$Ted is not required to recognize any income until he has collected $40$ payments $(40$ $$1,500=$ $$60,000).$

B$.$If Ted collects $100$ payments and then dies in Year $9,$ Ted$$s final tax return should include a miscellaneous itemized deduction not subject to the $2\%$ AGI limit for $$10,000.$

C$.$If Ted lives and collects on the annuity for $130$ months, the amounts received in the last $10$ months are excludible from his gross income.

D$.$For each $$1,500$ payment received in the first year, Ted can exclude $$1,000$ in gross income.