Which of the Following Statements Regarding the Tax Treatment of Variable

Which of the following statements regarding the tax treatment of variable annuity contracts is false?

A) Earnings on the contributions to a variable annuity are not taxed during the accumulation phase.
B) If an investor opts to make a random, partial, lump sum withdrawal, the entire amount of the withdrawal will be taxed as ordinary income to the investor.
C) If an investor opts to receive regular payments of a specific amount-i.e., annuities-part of each payment will be considered repayment of principal and will not be subject to taxation.
D) An investor who makes a withdrawal prior to having reached the age of 62 ½ will be subject to a 10% penalty on the withdrawal.