Answer:
ordinary income taxed at ordinary income tax rates that is not subject to a penalty
Explanation:
Annuity is simply said to be contract that is drawn that helps in the provision of income for a number or specified period of years. It seek to protects a person from outliving his/ her money. It is not a life insurance but rather a tool or a vehicle for the accumulation or gathering of money and the liquidation of an estate. There are Fixed annuities, equity indexed annuities, and variable annuities.
