Which of the following is a description of how the annuity exclusion ratio is calculated for an annuity paid over a fixed period?

Question

Quizplus · Accepted Answer

For an annuity paid over a fixed period, the exclusion ratio is calculated by dividing the original investment by the total expected return (i.e. the total amount of payments received over the fixed period). This ratio determines the portion of each payment that is considered a return of principal and therefore not subject to taxation.

Which of the Following Is a Description of How the Annuity