a) Anne purchased an annuity from an insurance company that promised to pay her $24,000 per year for the next ten years. Anne paid $176,400 for the annuity, and in exchange she will receive $240,000 over the term of the annuity.
1) How much of the first $24,000 payment should Anne include in gross income? (Do not round intermediate calculations.)
2) How much income will Anne recognize over the term of the annuity?
Part B
This year, Leron and Sheena sold their home for $1,186,500 after all selling costs. Under the following scenarios, how much taxable gain does the home sale generate for Leron and Sheena? (Leave no answer blank. Enter zero if applicable.)
1) Leron and Sheena bought the home three years ago for $210,000 and lived in the home until it sold. WHAT IS THE TAXABLE GAIN?
2) Leron and Sheena bought the home one year ago for $976,500 and lived in the home until it sold. WHAT IS THE TAXABLE GAIN?