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Juan owns a life insurance contract with a surrender value of $170,000 and a cost basis of $75,000 which has a current outstanding loan of

Juan owns a life insurance contract with a surrender value of $170,000 and a cost basis of $75,000 which has a current outstanding loan of $50,000. He exchanges his life insurance contract for an annuity that he will own. THe value of the annuity is $120,000. What are Juan's realized gain or loss, recognized gain or loss, and basis in the new annuity contract?

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