You Can Avoid Current Taxes on a Withdrawal of Cash

question 181

Multiple Choice

You can avoid current taxes on a withdrawal of cash value if

• A)you are over age 59 1/2.
• B)you are under age 59 1/2.
• C)you switch your investment earnings into another policy and fill out an 1035 exchange form.
• D)you assign the proceeds to a nonrevocable trust.

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Definitions:

Expected Returns

The anticipated amount of profit or loss an investment is predicted to generate based on historical or projected performance.

Securities

Securities that signify ownership in a corporation that's publicly traded (such as shares), a debt obligation to a government entity or a company (through bonds), or entitlements to ownership through options.

Prospectus

A formal document that companies use to describe the securities they are offering for participants and investors.

Registration Process

The sequence of actions taken to officially sign up or enroll in a service, event, or system.