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

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

I. Individual annuity distributions are never taxable.
II. Once the annuitant has recovered the premiums he or she paid for the annuity, the entire annuity distribution is taxable.
A) I only
B) II only
C) both I and II
D) neither I nor II

ANSWER

Answer: B