Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps

Exercise 15

Juan is single and retired on January 1, 2010 at age 62. He is entitled to receive monthly payments of $1,500 over his life from his employer's qualified pension plan. The payments began January 1, 2010. He contributed $71,500 to the plan prior to his retirement. Using the simplified method, how much of the payments will be included in his income for 2010? a. $0.
B) $3,300.
C) $14,700.
D) $18,000.