Barbara age 64 retired in June Starting in July Cinthia received 2 000 per month from annuity
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Question:
Barbara age 64 retired in June Starting in July Cinthia received 2 000 per month from annuity she has contributed 260 000 to annuity her live expectancy is 20 years. How much is excluded from income using the simplified method? Use 260 as the factor to divide by.
1. Enter total amount received this year
2. Enter cost in plan at the annuity starting date
3. Factor at annuity starting date 260
4. Divide line 2 by line 3
5. Multiply line 4 by the number of monthly payments this year
6. Amount, if any, recovered tax free in prior years
7. Subtract line 6 from line 2
8. Enter the smaller of line 5 or 7
9. Taxable amount this year. Subtract line S from line 1
Related Book For
Concepts in Federal Taxation
ISBN: 9780324379556
19th Edition
Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher
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