Wally purchased a private annuity two years ago that would pay him $30,000 for life. At his death, the annuity will pay his wife, Deana, $15,000 per year for life. Wally died last week and his executor must determine the value of his gross estate. Deana is age 64 and the § 7520 rate is 6%. What amount of the annuity is included in Wally’s gross estate?
a. Nothing- the annuity ends at Wally’s death
b. The PV of Deana’s future income stream of $152,477
c. The amount the insurance company would charge for a single annuity on Deana’s life
d. The value of the annuity multiplied by the cost basis.