Thursday, February 22, 2007
Annuity:What is a 1035 exchange?
1035 refers to a provision in the tax code which allows for the direct transfer of accumulated funds in a life insurance policy, endowment policy or annuity policy to another life insurance policy, endowment policy or annuity policy, without creating a taxable event.
Title 26, Subtitle A, Chapter 1, Sub chapter O, Part III, Section 1035states that "no gain or no loss shall be recognized on the exchange" of a life insurance policy for another life insurance policy or endowment or annuity policy.
An endowment for another endowment with a maturity no later than the maturity date of the endowment being replaced.
An annuity policy for that of another annuity policy.
The 1035 exchange is one of the few parts of the tax code that works in your favor. For example, when you sell shares of stock to buy shares of a different company, the profits on your investment are subject to taxes. With annuities, you can exchange one company's product for another's with the earnings from your original investment still tax-deferred until you take money out of annuities for good.
www.legacyannuities.com annuity annuity quotes
1035 refers to a provision in the tax code which allows for the direct transfer of accumulated funds in a life insurance policy, endowment policy or annuity policy to another life insurance policy, endowment policy or annuity policy, without creating a taxable event.
Title 26, Subtitle A, Chapter 1, Sub chapter O, Part III, Section 1035states that "no gain or no loss shall be recognized on the exchange" of a life insurance policy for another life insurance policy or endowment or annuity policy.
An endowment for another endowment with a maturity no later than the maturity date of the endowment being replaced.
An annuity policy for that of another annuity policy.
The 1035 exchange is one of the few parts of the tax code that works in your favor. For example, when you sell shares of stock to buy shares of a different company, the profits on your investment are subject to taxes. With annuities, you can exchange one company's product for another's with the earnings from your original investment still tax-deferred until you take money out of annuities for good.
www.legacyannuities.com annuity annuity quotes
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