Ross owns an annuity. He decided that he no longer has a need for it and wants to exchange it for a life insurance policy. To get the policy he wants, he will have to exchange the annuity and add additional money. Which of the following is correct? He can make the exchange, but it will be taxable to the extent of the value of the annuity. O He can make the exchange, but it will be taxable to the extent of the annuity less the additional money he puts into the life insurance policy. He can make the exchange under Section 1035, which will not be taxable. He can make the exchange, which will not be taxable, but his basis will not reflect any of the investment into the life insurance policy