McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 69

Gramps purchased a joint survivor annuity that pays $500 monthly over his remaining life and that of his wife, Gram.Gramps is 70 years old and Gram is 65 years old.Gramps paid $97,020 for the contract.How much income will Gramps recognize on the first payment?