Susan purchased an annuity for $120,000.She is to receive $15,000 each year and her life expectancy is 12 years.If Susan collects under the annuity for 13 years,the entire $15,000 received in the 13th year must be included in her gross income.

Question

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The entire $15,000 received in the 13th year would be considered an excess distribution and must be included in Susan's gross income if she collects under the annuity for more than her life expectancy.

Susan Purchased an Annuity for $120,000