It once was customary to honor one's mother on Mother's Day by wearing a carnation, red if she was/were alive, white if she was/were not.
The intended context is a friendly letter.
A. WAS is the correct word here. The subjunctive form (WERE) would be appropriate only if the condition (the mother's being alive) was improbable, doubtful or contrary to fact. If the condition is possible, use the ordinary form of the verb )WAS).