(a) General rules No gain or loss shall be recognized on the exchange of—
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(1) a contract of life insurance for another contract of life insurance or for an endowment or annuity contract or for a qualified long-term care insurance contract;
Amended 2006, 2018
- 2018 Pub. L. 115-141 Pub. L. 115–141 struck out “or” after semicolon at end.
- 2006 Pub. L. 109-280 Pub. L. 109–280, § 844(b)(3)(A), which directed amendment by inserting “or for a qualified long-term care insurance contract” before semicolon “at the end”, was executed by making the insertion before “; or” to reflect the probable intent of Congress.
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(2) a contract of endowment insurance (A) for another contract of endowment insurance which provides for regular payments beginning at a date not later than the date payments would have begun under the contract exchanged, or (B) for an annuity contract, or (C) for a qualified long-term care insurance contract;
Amended 2006
- 2006 Pub. L. 109-280 Pub. L. 109–280, § 844(b)(3)(B), which directed amendment by inserting “, or (C) for a qualified long-term care insurance contract” before semicolon “at the end”, was executed by making the insertion before “; or” to reflect the probable intent of Congress.
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(3) an annuity contract for an annuity contract or for a qualified long-term care insurance contract; or
Amended 2006
- 2006 Pub. L. 109-280 Pub. L. 109–280, § 844(b)(3)(C), inserted “or for a qualified long-term care insurance contract” after “annuity contract”.
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(4) a qualified long-term care insurance contract for a qualified long-term care insurance contract.
Amended 2006
- 2006 Pub. L. 109-280 Pub. L. 109–280, § 844(b)(4), added par. (4).
(b) Definitions For the purpose of this section—
(1) Endowment contract A contract of endowment insurance is a contract with an insurance company which depends in part on the life expectancy of the insured, but which may be payable in full in a single payment during his life.
Amended 1984, 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514 struck out “subject to tax under subchapter L” after “with an insurance company”.
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 224(a), which directed the substitution of “an insurance company subject to tax under subchapter L” for “a life insurance company as defined in section 801”, was executed by making such substitution for “a life insurance company as defined in section 816” to reflect the probable intent of Congress and the earlier amendment by Pub. L. 98–369, § 211(b)(15), which substituted “as defined in section 816” for “as defined in section 801”.
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 211(b)(15), substituted “section 816” for “section 801”.
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(2) Annuity contract An annuity contract is a contract to which paragraph (1) applies but which may be payable during the life of the annuitant only in installments. For purposes of the preceding sentence, a contract shall not fail to be treated as an annuity contract solely because a qualified long-term care insurance contract is a part of or a rider on such contract.
Amended 2006
- 2006 Pub. L. 109-280 Pub. L. 109–280, § 844(b)(1), inserted at end “For purposes of the preceding sentence, a contract shall not fail to be treated as an annuity contract solely because a qualified long-term care insurance contract is a part of or a rider on such contract.”
(3) Life insurance contract A contract of life insurance is a contract to which paragraph (1) applies but which is not ordinarily payable in full during the life of the insured. For purposes of the preceding sentence, a contract shall not fail to be treated as a life insurance contract solely because a qualified long-term care insurance contract is a part of or a rider on such contract.
Amended 2006
- 2006 Pub. L. 109-280 Pub. L. 109–280, § 844(b)(2), inserted at end “For purposes of the preceding sentence, a contract shall not fail to be treated as a life insurance contract solely because a qualified long-term care insurance contract is a part of or a rider on such contract.”
(c) Exchanges involving foreign persons To the extent provided in regulations, subsection (a) shall not apply to any exchange having the effect of transferring property to any person other than a United States person.
Amended 1997
- 1997 Pub. L. 105-34 Pub. L. 105–34 added subsec. (c) and redesignated former subsec. (c) as (d).
(d) Cross references
Amended 1997
- 1997 Pub. L. 105-34 Pub. L. 105–34 added subsec. (c) and redesignated former subsec. (c) as (d).
(1) For rules relating to recognition of gain or loss where an exchange is not solely in kind, see subsections (b) and (c) of section 1031.
(2) For rules relating to the basis of property acquired in an exchange described in subsection (a), see subsection (d) of section 1031.