The exclusion ratio only needs to be calculated for periodic distributions. For a surrender of a non-qualified annuity, a nonperiodic distribution of the entire annuity, the taxable amount is simply the gross distribution amount minus the amount of the distribution that represents investment in the contract. If the payer knows the amount that is investment in the contract, which they should know unless they've somehow lost the investment and distribution history, they will show in box 5 of the Form 1099-R the amount that represents investment in the contract and will show in box 2a the remainder of the distribution, the taxable amount.
