Which of the following is not true of Section 1035 Policy Exchanges?
A. It is an IRS Code which permits like kind exchanges of property B. It is typically used when exchanging or replacing a less competitive life policy with a more competitive life policy C. Any exchange made under Section 1035 of the Internal Revenue Code must be completed within 30 days. D. It requires an absolute assignment of the existing policy to the replacing company who surrenders the contract and issues a replacement policy.
The answer to this is C. There are a lot of people who usually become confused when the IRS is already involved but it helps to become informed about the various rules and regulations that are set by the agency. Letter C says that there is a completion limit of 30 days. According to the rules, there is no specific time limit that is stated.
This means that the exchange can still be completed but within a different time frame. It may sometimes differ from one situation to another. Whenever you are feeling some confusion regarding the code, you can always research about it to be sure.