Test id: $281220215$

Question #$25$ of $50$

Question ID: $1591541$

When done under the terms of IRC Section $1035,$ the exchange of one life insurance or annuity contract $($with gain$)$ for another accomplishes which of the following? $($Assume neither contract is a modified endowment contract and that the original contract's value includes basis and gain.$)$

A$)$ The basis and gain of the original contract are transferred intact to the new contract.

B$)$ The total contract value of the original contract is not considered.

C$)$ The total contract value of the original contract becomes the starting basis of the new contract.

D$)$ The total contract value of the new contract is zero.