Question

When determining the percentage of an annuity payment that is subject to tax, the investment in the annuity is divided by the total of the expected payments to be received. which of the following is the name of the portion that is subject to tax? question 24 options:

a. the inclusion ratio.
b. the exclusion ratio.
c. the current ratio.
d. the working capital ratio.

Answer 1

The portion of the annuity payment that is subject to tax is called the exclusion ratio. Therefore, the correct option is B.

Step-by-step explanation:

The correct answer to the question is option b. The exclusion ratio.

When determining the percentage of an annuity payment that is subject to tax, the investment in the annuity is divided by the total of the expected payments to be received. The result is the exclusion ratio, which represents the portion of the annuity payment that is excluded from being taxed.