Which of the following is a True statement about the first payment received from a purchased annuity?
A) The payment is included in gross income.
B) A portion of the payment is a return of capital.
C) The payment can only be taxed in the year after the annuity was purchased.
D) The payment is not taxed until the annuity payments cease altogether.
E) None of these is a True statement.
Correct Answer:
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