Godfrey is age 77.He paid $240,000 for a single life annuity contract that will pay him $28,800 per year for life.The taxable amount of the first $28,800 payment is

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The taxable amount is calculated by subtracting the exclusion ratio from the annual payment. The exclusion ratio is determined by dividing the investment in the contract ($240,000) by the expected return (which is based on the life expectancy of the annuitant at the time of annuity purchase). Without the specific life expectancy or expected return provided, a general approach is to divide the investment by the annual payment to find the number of years it would take to recover the investment. Here, $240,000 / $28,800 = 8.33 years. The portion of each payment that is a return of the investment is not taxable. Assuming the IRS tables or a specific life expectancy calculation isn't provided, the taxable amount is calculated by the difference between the annual payment and the non-taxable portion, which aligns with choice A given the options and typical methods of calculation for annuity payments.

Godfrey Is Age 77