2. Which of the following are correct regarding qualified annuities?

a. They must comply with the minimum distribution rules.

b. The payments generally have a 50% exclusion ratio.

c. They can be purchased with funds from life insurance proceeds or IRA assets.

d. The payments avoid the 10% early withdrawal penalty.

3. Which of the following is correct?

a. Non-qualified annuities do not have to comply with the minimum distribution rules.

b. An exchange of a life insurance policy for an annuity is not a tax free exchange under Section 1035.

c. A loss on a variable annuity can be deducted even if the annuity is exchanged for another annuity.

d. Annuities are considered IRD assets.