Juanita paid a life insurer $45,000 in exchange for an immediate life annuity. Juanita will receive $500 per month from the insurer, and her life expectancy is 15 years (180 months)
Assume that Juanita receives 12 monthly payments of $500 the first year. How much taxable income must she report?
A) $3,000
B) $4,000
C) $4,500
D) $6,000
Answer: A
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