Andy asks:
Let us assume that a motion picture company offers me a salary of one million dollars to perform in a film.
I tell them " Instead of giving me one million dollars, just set up an annuity that pays me five thousand dollars a month for the rest of my life... (assuming that the present value of that annuity is one million )
Ok, what is the tax liability . Is it
1) Tax is due immediately on the value of the annuity, which I would have received no money and would be unable to pay ??or
2) Tax is due on the income from the annuity, as the money is received ???Thanks for any discussion on this....
Andy