---
title: Tax-Free Insurance Policy Exchange Form (Section 1035) | Free Template | Paperform
description: Report Section 1035 tax-free exchanges of insurance and annuity policies. Calculate cash boot, reportable gains, and ensure IRS compliance with this professional template for advisors and tax preparers.
url: "https://paperform.co/templates/tax-free-insurance-policy-exchange-form-section-1035"
type: static
generatedAt: "2026-03-28T00:45:21.179Z"
---

[← Back to free form templates](/templates/)    ![Tax-Free Insurance Policy Exchange Form (Section 1035)](https://img.paperform.co/fetch/f_webp/https://d3gw2uv1ch7vdq.cloudfront.net/content/form_templates/assets/tax-free-insurance-policy-exchange-form-section-1035.png)
    [Preview](https://_preview.paperform.co/ai-template/tax-free-insurance-policy-exchange-form-section-1035) [Use this template for free](/create?ai-template=tax-free-insurance-policy-exchange-form-section-1035)    [Legal & Compliance Forms](/templates/category/legal/)[Financial & Accounting Forms](/templates/category/financial/) [Consulting](/templates/industry/consulting/)[Finance](/templates/industry/finance/)[Insurance](/templates/industry/insurance/)[Tax Services](/templates/industry/tax-services/) [Accountant](/templates/role/accountant/)[Financial Advisor](/templates/role/financial-advisor/)[Insurance Agent](/templates/role/insurance-agent/)     About this free form template
### Simplify Section 1035 Exchange Reporting with Paperform

A Section 1035 exchange allows policyholders to exchange certain insurance and annuity contracts without triggering immediate tax consequences—but proper documentation and gain calculation are critical for IRS compliance. This **Tax-Free Insurance Policy Exchange Form** template helps insurance professionals, financial advisors, tax preparers, and policyholders accurately report like-kind policy exchanges, document cash boot received, and calculate any reportable gains.

#### Built for insurance and tax professionals

Whether you're an insurance agent facilitating policy exchanges, a CPA preparing client tax returns, or a financial advisor managing portfolio transitions, this template captures all the details required for Section 1035 compliance: original policy basis, fair market value of the exchanged policy, cash boot received, and step-by-step gain calculations.

Paperform's **calculation fields and conditional logic** automatically compute adjusted basis, realized gain, recognized gain, and deferred gain based on the values entered—eliminating manual spreadsheet errors and ensuring accurate IRS Form 1099-R reporting. The form adapts based on policy type (life insurance, endowment, annuity, or long-term care) and whether cash or other property was received as part of the exchange.

#### Automate your tax and compliance workflows with Stepper

Once a Section 1035 exchange form is submitted, you can use **[Stepper](https://stepper.io)** to automate downstream compliance tasks: route completed forms to your tax prep team, generate client summaries, update your CRM or policy management system, and send confirmation emails with calculated gain breakdowns. Stepper's AI-native workflows keep your firm organized and compliant without manual data entry.

For firms managing multiple clients or requiring eSignatures on acknowledgment statements, **[Papersign](https://papersign.com)** integrates seamlessly to capture policyholder signatures on exchange disclosures and tax acknowledgment forms, maintaining a complete audit trail.

#### Trusted by financial and insurance professionals

Paperform is SOC 2 Type II compliant and designed for professional service firms that need secure, accurate, and client-friendly forms. With 30,000+ templates, native integrations with CRMs and tax software, and powerful automation through Stepper, Paperform helps you deliver a polished, compliant experience that saves time and reduces risk.

Whether you're processing one exchange or dozens, this template gives you the foundation to collect complete, calculation-ready data—so you can focus on advising clients and staying compliant.
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