Assume Sandy estimates she can earn a 6% before-tax rate of return on the proceeds from cashing in the policy.
Assume she can earn a 6% return for the remainder of her life and that she will reinvest all earnings at the same 6% before-tax rate of return. If Sandy expects to live 10 more years, which alternative will yield the greater amount to her beneficiaries upon her death? (Given: The future value of an annuity in 10 years assuming a 4.32% after-tax return is 12.19. The future value of an annuity in 10 years assuming a 2.16% return is 11.03).Tax law/accounting chapter 5 gross income. Question 99 part b I'm stuck in how to arrive at the answer.
Am I on the right track with this first part? What are the next steps?
Surrender value 6% x 10 years 6,000
After-tax rate 4.32% x 10 years 4,320
Annuity factor: 4.32% @ 10 years
(After-tax return = 6 (1-0.24) 7.89
Recently Asked Questions
- Are Congress and all taxpayers as well as the IRS forever bound by the Supreme Court decision?
- Please refer to the attachment to answer this question. This question was created from tax 3.docx. Additional comments: "Specific calculations to get to this
- Which of the following, if any, would be a violation of section 6695 by a return preparer? Select one: a.Failing to include the return preparer's SSN on the