In TurboTax Online, report a 1099-R 1035 exchange by following these steps:
- Down the left side of the screen, click on Federal.
- Down the left side of the screen, click on Wages & income.
- Scroll down to Retirement Plans Social Security. Click the down arrow to the right.
- Click Start / Revisit to the right of IRA 401K Pension Plan Withdrawals.
- At the screen Did you get a 1099-R in 2025?, select Yes.
- At the screen Choose all the situations that apply to you, make selection and Continue.
- You will be given options:
- to connect with your financial accounts,
- to upload your form, or
- type it in myself.
- In box 7, the distribution code should be "6".
See also this TurboTax Help.
The distribution in box 1 of the 1099-R will be reported in box 5a of the IRS form 1040. Box 5b will report $0 taxable income.
Form 1099-R Section 1035 Exchange Life Insurance Annuity or Endowment Contracts may be found here.
Section 1035 exchange
These exchanges of contracts are generally reportable on Form 1099-R.
A tax-free section 1035 exchange is the exchange of:
- (a) a life insurance contract for another life insurance contract, or for an endowment or annuity contract, or for a qualified long-term care insurance contract;
- (b) a contract of endowment insurance for another contract of endowment insurance that provides for regular payments to begin no later than they would have begun under the old contract, or for an annuity contract, or for a qualified long-term care insurance contract;
- (c) an annuity contract for an annuity contract or for a qualified long-term care insurance contract; or
- (d) a qualified long-term care insurance contract for a qualified long-term care insurance contract.
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