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Free OH L&H Practice Test
20 questions sampled from our Life & Health bank for Ohio. AI explanations shown after each answer.
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Question 1 of 20
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National-LH-I Life Policy Types
medium
Under IRC §72(u), if an annuity contract is held by a non-natural person (e.g., a corporation or non-grantor entity) what is the general consequence for federal income tax treatment?
A
The contract is not treated as an annuity for purposes of §72 and any increase in cash value is currently taxable to the owner as ordinary income each year
B
The contract retains full tax deferral but loses the §1035 exchange privilege
C
The contract is taxed only at surrender or annuitization, identical to ownership by an individual
D
All gain at surrender becomes long-term capital gain rather than ordinary income
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