1035 Exchange

MR. WATSON: Who can tell me what a 1035 exchange is? We already covered it.

MAN: Exchange and transferring like kind products to like kind products. Rolling over gains so they will be taxed later.

MR. WATSON: Holy smokes! Well done! Tell them.

MAN: Exchanging or transferring like kind to like kind.

WOMAN: Without getting taxed.

MR. WATSON: Can I go from life to life?

MAN: Yes.

MR. WATSON: Annuity to annuity?

ALL: Yes.

MR. WATSON: Life to annuity?

ALL: Yes.

MR. WATSON: Can I go annuity to annuity?

ALL: Yes.

MR. WATSON: Annuity to life?

ALL: No.

MR. WATSON: No. You can't step down.

MR. WATSON: Qualified annuity plans. Tell me what 501C3 is.

MAN: Teacher, preacher, nonprofit.

MR. WATSON: Now, tell them, Cotton, what a 403(b) is.

Student: 403(b) is an annuity that a 501c3 can invest in, pretax.

MR. WATSON: Very good.