"A client surrenders a variable annuity contract 5 years after purchase because of poor performance. The customer invested $50,000 and redeemed it when the NAV was $40,000, however the customer only received $37,000 because a $3,000 surrender fee was imposed. The tax consequence is:"

 D. $10,000 deductible ordinary loss and $3,000 non-deductible loss

Explanation:

Should a person surrender a variable annuity early, their cost basis will be  the amount they invested to get the annuity and the redemption amount will be considered as sales proceeds. If the sales proceeds are less than the cost basis, this is a loss and will be treated as a deductible ordinary loss.

The surrender fee will not however be treated as an deductible loss meaning that in this case $3,000 would be a non-deductible loss and $10,000 would be a deductible ordinary loss.

i think the answer is a. dependable person

i hope this is right!