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Outgoing Partial 1035 Exchanges Allowed on NQ Annuities

Outgoing Partial 1035 Exchanges Allowed

 

Effective 1/4/2017, EquiTrust now allows outgoing partial 1035 exchanges on non-qualified, inforce annuities.

This option is not available to RMDs, systematic withdrawals, income withdrawals, life-insurance policies, payout annuities or qualified annuity contracts.

If any portion of the Partial 1035 exceeds the free-withdrawal amount, surrender charges and MVA may apply – consistent with any other partial withdrawal.

At the time of the partial 1035 exchange, the taxable income and cost basis will be split proportionately.  The partial 1035 exchange transaction is a non-taxable event.

After a partial 1035 exchange, any subsequent partial withdrawals processed within a defined period of time are subject to IRS rules.  Questions about the tax implications of 1035 exchanges should be directed to a professional tax advisor.


EquiTrust does not offer investment advice to any individual or agent and this material should not be construed as investment advice.
FOR AGENT USE ONLY. NOT FOR USE WITH THE PUBLIC.
 
 

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