A taxpayer, age 64, purchases an annuity from an insurance company for $64,000. She is to receive $533 per month for life. Her life expectancy is 20.8 years from the annuity starting date. Assuming that she receives $6,400 this year, what is the exclusion percentage, and how much is included in her gross income?

Exclusion percentage = 48.10

$3321.6 IS included in her gross income

Explanation:

Exclusion Percentage = Investment in Total /(Payments made * Life Expectancy *Total months in a year)

Exclusion Percentage = $64,000 / ($533 * 20.8 *12)

Exclusion Percentage = 0.4810

= 48.10%

The Included in income amount can be calculated using the following formula:

Included in Income = (Received amount - Return on Capital)

& Return on Capital = ( Received amount * Exclusion percentage)

When  ROC = $6,400 * 0.4810 = $3078.4

Hence, Included in income = $6,400 - $3078.4 = $3,321.6

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1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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