Question #$24$ of $50$

Which of the following statements about the taxation of annuities is TRUE?

A$)$ Distributions from a deferred annuity $($except through annuitization$)$ are treated on a FIFO $($first in$-$first out$)$ basis.

B$)$ Annuitization at any age permits annuity distributions to be taxed under an exclusion ratio formula that permits part of each payment to be a taxfree return of basis.

C$)$ All annuity distributions $($except through annuitization$)$ made before age $72$ are subject to a possible $10\%$ penalty tax.

D$)$ Annuity contract values paid in conjunction with the death of the annuitant avoid all income taxation.