Which of the following is a true statement about the first payment received from a purchased annuity?

Question

Quizplus · Accepted Answer

The first payment received from a purchased annuity typically includes both a return of capital (which is not taxable) and earnings (which are taxable). So, option B is correct as it mentions that a portion of the payment is a return of capital, which is not taxable. Option A is incorrect because the entire amount of the payment is not taxable. Option C is incorrect because the payment is taxable in the year it is received. Option D is incorrect because the payments are taxable when received, not when they stop altogether. Therefore, the only correct option is B.

Which of the Following Is a True Statement About the First