Partial annuity redemptions

Assuming this is not a pre 8/14/1982 contract... the rule is gain comes out first followed by basis.

Example: Basis is $100,000. Now worth $110,000. Withdrawal is $5000. All $5000 taxable as gain. T/P will get a 1099-R reflecting that. Additionally, it is taxed as ordinary income and subject to the 10% early withdrawal penalty if the t/p has not attained age 59 1/2.

Same example as above, except withdrawal is $37,000. Taxable gain is $10,000. Remaining $27,000 is a return of principal and reduces basis to $73,000.

Doesn't the tax treatment depend on whether or not the plan is qualified or non-qualified, and whether periodic distributions have started?

Based on the content of the OP, I assumed this was a distribution before the annuity starting date from a nonqualified plan.