What is the investment portion remaining
Course:- Accounting Basics
Reference No.:- EM13139049

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In 1991, Barbara purchased a single life annuity for $250,000 that would pay her $25,000 per year for life beginning in 2002. Barbara's life expectancy from 2002 forward on which the payments were based is 25 years.

a. How much would Barbara include in income if she is still receiving payments in 2020?

b. If Barbara dies in 2011 after receiving that year's payment, what is the investment portion remaining? How is the unrecovered investment treated for tax purposes?

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