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14 February, 09:10

A customer has invested a total of $10,000 in a nonqualified deferred annuity through a payroll deduction plan offered by the school system where she works. The annuity contract is currently valued at $16,000, and she plans to retire. On what amount will the customer be taxed if she chooses a lump-sum withdrawal?

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  1. 14 February, 10:29
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    On $6000 amount customer be taxed

    Explanation:

    given data

    total invest = $10000

    current value = $16000

    to find out

    On what amount customer be taxed

    solution

    we know customer is invest here total $10000 and

    current value is now $16000

    so we can say that here payment non qualified deferred, annuity after tax

    so tax are paid of earning

    so earning = current value - invest

    earning = 16000 - 10000

    earning = $6000

    so on $6000 amount customer be taxed
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