SERIES 6 ASKS QUESTIONS ON 1035 EXCHANGES

The Series 6 asks about 1035 exchanges allowed under the tax code.  There must be a true exchange of similar policies.  For a 1035 exchange, Mrs. Jones cannot surrender her old annuity for cash, and then use the cash to purchase a new annuity.  No, she must exchange her old annuity for a new annuity.  Furthermore, the annuitant must be the same on the new annuity as listed on the old annuity.  And finally, the exchange must involve similar property, not, for example, an annuity exchanged for a real estate parcel.