Answer:
$28
Explanation:.
Calculation for How much of the first $80 payment will George exclude from his gross income
First step is to calculate the return of capital per payment by using the annuity exclusion ratio
Annuity exclusion ratio =($5,200/($80*100))
Annuity exclusion ratio =($5,200/$8,000)
Annuity exclusion ratio = 65%
Therefore the return of capital per payment is be 65%
Now let calculate How much of the first $80 payment will George exclude from his gross income
Gross income exclusion=$80- (65%*$80)
Gross income exclusion=$80-$52
Gross income exclusion=$28
Therefore $28 of the $80 monthly payment will be excluded in the gross income
