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tax-On July 1, 2000, when Betty was 65 years old, she purchased an annuity contract for

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Question;23. LO.4 On July 1, 2000, when Betty was 65 years old, she purchased an annuity contract for $108,000. The annuity was to pay Betty $9,000 on June 30 each year for the remainder of her life. Betty died on August 31, 2013. What are the effects of the annuity on Betty?s gross income and taxable income for 2013?24. LO.4 An employer provides all of his employees with life insurance protection equal to twice the employee?s annual salary. Melba, age 42, has an annual salary of $70,000. Is Melba required to recognize income even though she is still alive at the end of the year and thus nothing has been collected on the life insurance policy? Explain.25. LO.4 Eve is 67 and unmarried. She receives $12,000 a year in Social Security benefits and $20,000 from a taxable pension. She is in the 15% marginal tax bracket on her Federal income tax return. She claims the standard deduction. She is considering selling stock she has held for more than one year. Her cost of the stock is $6,000, and its fair market value is $13,000. She has no other gains or losses for the year. She has asked you to estimate the tax consequences of selling the stock.

 

Paper#41282 | Written in 18-Jul-2015

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