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SEPP and 1035 Exchange

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ByKen

L1: SEPP and 1035 ExchangeDoes anyone know if it is permissable to make a 1035 exchange between two non-qualified annuities while receiving SEPP (prior to 59 1/2). The payments will continue so the only issue is if the exchange is violative.
thank you2005-09-22 08:45, By: ken, IP: [24.47.37.124]

L2: SEPP and 1035 ExchangeThis is not an “authoritative” response. However, I cannot see why exchanging 1 investment for another would affect the SEPP. You can buy or sell any investments in the SEPP account, so I don’t see why this would be any different.
You might want to have the annuity company do research thru their resources.2005-09-22 08:51, By: dlztaxes, IP: [4.175.9.61]

L2: SEPP and 1035 ExchangeThee should be no problem doing a 1035 Exchange of the contract. With that said, you will probably not get a code of ‘2’ on the 1099 from either company so you may have to justify the transaction with the IRS.
I would start by contacting the new insurance company and get their views and suggestions – talk to more than just the agent.2005-09-22 08:53, By: Gfw, IP: [172.16.1.70]

L2: SEPP and 1035 ExchangeHi,
Wow was that quick response fomr both of you. I really appreciate it.
I’m somewhat troubled by the language in 2004-62 (e)(ii)as follows:
(e) Changes to account balance. Under all three methods, substantially equal periodic payments are calculated with respect to an account balance as of the first valuation date selected in paragraph (d) above. Thus, a modification to the series of payments will occur if, after such date, there is (i) any addition to the account balance other than gains or losses, (ii) any nontaxable transfer of a portion of the account balance to another retirement plan, or (iii) a rollover by the taxpayer of the amount received resulting in such amount not being taxable.
Do you think it is a non-taxable exchange to another retirement plan, or does that mean something else.
Thanks again.2005-09-22 09:02, By: ken, IP: [24.47.37.124]

L2: SEPP and 1035 ExchangeYou wouldn’t really be changing retirement plans, only insurance annuity contracts – same as changinbg invesments in an IRA. 2005-09-22 09:07, By: Gfw, IP: [172.16.1.70]

L2: SEPP and 1035 ExchangeThanks,
You’re terrific !!!!!2005-09-22 09:08, By: ken, IP: [24.47.37.124]

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