Lola, age 67, began receiving a $1,000 monthly annuity in the current year upon the death of her husband. She received seven payments in the current year. Her husband contributed $48,300 to the qualified employee plan. Use the Simplified Method Worksheet below to calculate Lola's taxable amount from the annuity.
If your answer is zero, enter "0". If required, round your answers to the nearest whole dollar.
Simplified Method Worksheet
1. Enter total amount received this year.
1. $
2. Enter cost in the plan at the annuity starting date.
2. $
3. Age at annuity starting date
Enter
55 and under 360
56–60 310
61–65 260
66–70 210
71 and older 160
3.
4. Divide line 2 by line 3.
4. $
5. Multiply line 4 by the number of monthly payments this year. If the annuity starting date was before 1987, also enter this amount on line 8, and skip lines 6 and 7. Otherwise, go to line 6.
5. $
6. Enter the amount, if any, recovered tax-free in prior years.
6. $
7. Subtract line 6 from line 2.
7. $
8. Enter the smaller of line 5 or 7.
8. $
9. Taxable amount this year: Subtract line 8 from line 1. Do not enter less than zero.
9. $