1099-R distribution code 6.

What the IRS says code 6 is

Table 1 says: "Use code 6 to indicate the tax-free exchange of life insurance, annuity, long-term care insurance, or endowment contracts under section 1035." The used-with column lists W.

The payer instructions describe a section 1035 exchange as an exchange of one qualifying insurance or annuity contract for another. Exchanges are generally reportable on Form 1099-R, but reporting is not required when the exchange happens within the same company, is solely contract-for-contract with no designated distribution, and the company keeps adequate basis records.

Box 2a gets -0- for a nontaxable section 1035 exchange. For a partly taxable exchange, the payer files a separate Form 1099-R for the taxable amount.

How it affects Form 1040

A code 6 form with -0- in box 2a gives you no taxable amount to carry to line 5b of Form 1040 from that form. The 2025 Form 1040 instructions do not discuss section 1035 exchanges on lines 5a and 5b, so this page does not claim a line entry for the exchange itself.

The IRS notes that other property received or a cancelled contract loan at the time of the exchange may be taxable and reportable on a separate Form 1099-R. That separate form would carry its own code.

Common mistakes

• Treating the box 1 contract value as income. For a nontaxable exchange, box 2a is -0-.
• Overlooking a second Form 1099-R. Cash or a cancelled loan in the exchange can produce a separate taxable form.
• Expecting a form at all. A same-company, contract-for-contract exchange with adequate records does not have to be reported on Form 1099-R.
• Confusing 6 with W. W covers charges or payments for qualified long-term care insurance against a contract's cash value; Table 1 lists the two as usable together.

Worked example

Illustration, not a real case. A policyholder moves a life insurance contract to a different company's annuity contract in a section 1035 exchange. The new company reports the contract value in box 1, -0- in box 2a, total premiums in box 5 and code 6 in box 7a. A reader checking that form should find no taxable amount on it.

Related codes

Code 6 sits beside W, 9, F. The full 1099-R distribution codes lookup lets you search every code; the other pages in this set are 9, E, F, K, S, U, W.

Sources

Retrieved November 2, 2026. Review status: needed before this page is treated as final.

• IRS, Instructions for Forms 1099-R and 5498 (2026): Table 1, Guide to Distribution Codes, plus the box 1, 2a and 7a text.
• IRS, Instructions for Form 1040 (2025): lines 4a and 4b (IRA distributions) and 5a and 5b (pensions and annuities).

Form 1099-R changes for 2026: box 7 becomes box 7a. On forms for earlier years the code is in box 7. The Form 1040 instructions read are for tax year 2025.