Gross income is any interest, wage etc(money received) given to someone which they account for before any deductions and tax. Fran will have to include all $5400 of her first quarterly payment into her gross income because there are no deductions yet and tax when you consider what is put in gross income. Fran would have earned this amount as a payment from the purchasing of the annuity as it serves as a payment back for purchasing an annuity which to Fran, is an investment.
