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G was employed during the first six months of the year and earned a $80,000 salary. During the next 6 months, he collected $18,200 of unemployment compensation, n 6. borrowed $ his savings account (including $120 interest earned this year). When he left his former employer, he withdrew his retirement benefits (a qualified annuity) in a lump-sum of $60,000. He did not roll over this lump-sum: thus it will be taxable. G's parents loaned him $9,000 (interest-free) on July 1 of the current year, when the Federal rate was 3%. Gregory did not repay the loan during the year and used the money for living expenses. Calculate Gregory's adjusted gross income for the year. 8,000 (using his personal residence as collateral), and withdrew $1,000 from 7. A couple questions on Social Security benefits- A. Terry, a widow, is retired and receives S25,000 interest income and dividends and $10,000 in Social Security benefits. Terry is considering selling a stock at a $20,000 gain. What will be the increase in Terry's adjusted gross income as a result of the sale of the stock? B. Ray and Sally, married, receive $15,000 in social security benefits each year, along with a taxable pension of $60,000. They also have a tax free bond investment which pays them S10,000 yearly. How much of the $15,000 social security benefit is taxable? Mary, who is in the 25% marginal tax bracket, is considering purchasing an annuity that will pay her $15,000 per year for the remainder of her life. Her life expectancy is 15 years. The cost of the annuity is $155,695, and the cost is calculated to yield her an expected 5% return on her investment. As an alternative, Mary could place the $155,695 in a savings account yielding 5% and she could withdraw $15,000 eachyear for 15 years (reducing the value of the account to zero at the end of 15 years). She plans to take action 8, n January 1, 2017. How might the tax laws applicable to annuities affect Mary's decision? Show your calculations for the first year that support your conclusion (i.e. how much income will she have in 2017 if she chooses to buy the annuity vs. putting the money in a savings account?)

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