Which of the following statements is false regarding taxation of non-living entity owned nonqualified annuities?

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Which of the following statements is false regarding taxation of non-living entity owned nonqualified annuities?

a. Interest earned on the principal is tax-deferred.

b. Interest earned is taxed in the year it is earned.

c. Only human annuitants can receive tax-deferred interest on annuities.

d. A corporation that owns a nonqualified annuity will be required to pay tax on interest on a current-basis.

Answer: a. Interest earned on the principal is tax-deferred.

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