1035 Exchanges
Cost Basis
100

True or False: A personal check is processed as a 1035 exchange

FALSE. This is processed as NQ = other transfer

100

How many cost basis follow ups do we perform?

5

200

What is the advantage of a 1035 exchange?

Tax free way to upgrade to a new policy with better features/lower fees

200

When is cost basis required? 

1035 exchange transaction (NQ Replacement)

300
Funds coming from a savings account are coded as NQ = other transfer, and cost basis is coded. Is this correct?

NQ = other transfer is correct, but cost basis should not be coded

300

Calculate the cost basis. Check amount: $289,593. Interest: $16,255

Cost Basis: $273,338

400

What 2 pieces of coding need to be completed in LifePro for 1035 exchanges, and how should they be answered? 

1035 exchange code (External) + Questionable Cost Basis (Yes)

400

Does Puerto Rico cost basis get coded on the cost basis screen in LifePro? If not, where do we code? 

Parameter screen (ALT + P)

500

Why is it called a "1035 exchange"?

Section 1035 of the Internal Revenue Code

500

What is unique to Pre-TEFRA withdrawals?

Withdrawals can be taken from the basis

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