Jerry Purchased an Annuity Contract at the Beginning of 2004

Multiple Choice

Jerry purchased an annuity contract at the beginning of 2004 for $144,000. The contract specified that he and his wife would receive $1,000 per month for life. Jerry receives his first payment on February 1, 2018 when he is 59 years old and his wife is 56 years old. What amount of gross income should Jerry and his wife report on their 2018 income tax return from this annuity contract?

A) $-0-
B) $4,400
C) $6,600
D) $11,000