Jim,age 71,is a single taxpayer who retired from his job at the Lansing Corporation in 2016.On January 1,2017,when he begins to receive his annuity distribution,the value of his pension plan assets is $200,000 and his basis is zero.What amount must Jim receive in 2017 and how much of the amount he receives is taxable?

Required Amount
Distribution Taxable
A)$7,299 $7,299
B)$7,547 $-0-
C)$7,547 $7,547
D)$12,000 $10,000

Question

Jim,age 71,is a single taxpayer who retired from his job at the Lansing Corporation in 2016.On January 1,2017,when he begins to receive his annuity distribution,the value of his pension plan assets is $200,000 and his basis is zero.What amount must Jim receive in 2017 and how much of the amount he receives is taxable?
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Required Amount
Distribution Taxable
A)$7,299 $7,299
B)$7,547 $-0-
C)$7,547 $7,547
D)$12,000 $10,000

Quizplus · Accepted Answer

Jim's annuity distribution is fully taxable because his basis is zero, meaning he has no after-tax contributions to the plan. Therefore, the entire amount he receives is taxable.

Jim,age 71,is a Single Taxpayer Who Retired from His Job