Which of the following statements regarding nonperiodic distributions from an annuity contract prior to the annuity start date, issued after August 13, 1982, is true?

A) A nonperiodic distribution is taxed first as a taxable interest payment until the interest payments are completely exhausted, and then as a tax-free return of principal.

B) A nonperiodic distribution is first considered a tax-free return of principal and then a taxable interest payment.

C) A nonperiodic distribution is prorated equally bet

D) A nonperiodic distribution is taxed under the exclusion ratio rules.