Which of the following statements regarding the taxation of individual

Which of the following statements regarding the taxation of individual annuities is (are) true?

I. The exclusion ratio is the percentage of the annuity income that is taxable.
II. After the net cost of the annuity has been paid to the annuitant, the total annuity payment is taxable.
A) I only
B) II only
C) both I and II
D) neither I nor II

ANSWER

Answer: B