HW3 Q6.PNG - PI:3-45(similar to a Question He Tim retired...

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Unformatted text preview: @ PI:3-45 (similar to) a; Question He. Tim retired during the cunent year at age 5?. He purchased an annuity from American National Life Company for $20,000. The annuity pays Tim $250 per month for life. 5 (Click the icon to View the Expected Return Multiple table) Requirements 3. Compute Tim's annual exclusion. b. How much income will Tim report each year after reaching age 84? Requirement a. Compute Tim's annual exclusion. Begin by computing the exclusion ratio. (Enter the answer as a decimal rounded to tour decimal places, .XXXX.) Investment in the contract I Expected return = Exclusion ratio 20,000 I 80.400 = 0.2488 Compute Tim's annual exclusion. (Enter amounts as decimals, round interim calculations to four decimal places and the annual exclusion to the nearest cent.) Annual amount received x Exclusion ratio = Annual exclusion 3,000 x 0.2488 = $ 746.40 Requirement b. How much income will Tim report each year after reaching age 84'? The amount at income Tim will report each year after reaching age 84 will change it Tim “YE past 84 . Tim will be taxed on the entire amount he collects after his total exclusion reaches $20,000 . ...
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  • Spring '18
  • Tom Bonomo
  • Accounting, Decimal, Binary-coded decimal, Tim, annual exclusion

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