Question #$44$ of $50$

Whenever executing an exchange under Section $1035,$ the cost basis in the new contract is

A$)$ stepped up to the fair market value of the original contract

B$)$ stepped up to the fair market value of the original contract, only if an annuitant has died

C$)$ retained from the cost basis of the original contract

D$)$ retained from the cost basis of the original contract only if it was a qualified contract