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My mother in law has an annuity which she bought over 10 years ago. She invested $12000 and it is now worth $15,500. She has taken money out a few times previosly. WHen earnings are taken out, is it considered that all of the distribution is earnings or is some earnings and some principal? With the money still in, is $12000 principal and the balance earnings? What is the tax rate used for distributins?

Thank you, Doug
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