A 1035 exchange in annuities enables tax-free transfers without triggering taxes or surrender charges.
A 1035 exchange in the context of annuities allows an individual to transfer funds from one annuity to another without incurring taxes at the time of transfer.
It is not a taxable event as long as the funds are transferred directly between insurance companies to acquire a new annuity. This exchange avoids taxes on the amount transferred and usually avoids surrender charges as well, providing a tax-efficient way to adjust annuity investments.
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