Thomas purchased an annuity for $20,000 that will pay him $500 per month for ten years. What amount should Thomas include in his income each year?
A) $0
B) $2,000
C) $4,000
D) $6,000
C) $4,000
($500 × 12 months × 10 years) = $60,000 Expected return.
($20,000 / $60,000) × $6,000 = $2,000 Exclusion.
$6,000 - $2,000 = $4,000 amount included in income.
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