Effective October 24, 2011, the IRS relaxes the rules governing Code Section 1035 tax-free partial exchanges of deferred annuities. A direct transfer of a portion of the cash surrender value of a deferred annuity to another annuity, regardless of whether the annuities are with the same or two different insurers, will be treated as a tax-free Section 1035 exchange if no distributions or surrenders are made from either annuity within 180 days of the transfer, except for amounts received as an annuity for a period certain of 10 years or longer, or for one or more lives. Also, subsequent transfers from either annuity intended to qualify as Section 1035 exchanges will not be considered distributions or surrenders for purposes of this ruling. Rev. Pro. 2011-38, 2011-30 IRB
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