Which of the following statements is incorrect?
A. To determine the taxable amount of each annuity payment, the taxpayer must know the cost of the contract.
B. If annuity payments are to be received for a fixed period, the taxpayer does not need to refer to the life expectancy tables provided by the IRS.
C. The exclusion ratio represents the proportion of each annuity payment that will be tax-free.
D. Once the cost of the annuity has been recovered, any remaining payments will be tax-free.
Answer: D
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All of the following statements are true regarding accounting for software development costs except:
a. Firms must expense as incurred all costs incurred internally in developing computer software until such development achieves the technological feasibility of a product. b. Firms must capitalize as incurred all costs incurred internally in developing computer software. c. Researchers have found a significant association between costs and future earnings which support capitalizing and amortizing product development costs permitted by U.S. GAAP and IFRS. d. The interpretation of the meaning of technological feasibility has created diversity in the practice of accounting for software development costs.
Intensive distribution seeks many outlets in a market, while selective distribution seeks only one outlet in a given market area
Indicate whether the statement is true or false
On January 1, 2010, Zero Company obtained a $52,000, four-year, 6.5% installment note from Regional Bank. The note requires annual payments of $15,179, beginning on December 31, 2010. The December 31, 2011 carrying amount in the amortization table for this installment note will be equal to:
A) $26,000 B) $27,635 C) $21,642 D) $28,402
If the payee of the instrument is not mentioned on the face of the instrument, it is considered nonnegotiable
Indicate whether the statement is true or false