Updated September 28, 2026. Quick answer: code F reports the payments you receive back from a charitable gift annuity, an arrangement where you donated cash or appreciated property to a charity in exchange for its promise of fixed payments for life. Part of each payment can be ordinary income, part can be a taxable capital gain, and part can be a tax-free return of your own investment.
Read box by box from the IRS form text: Form 1099-R box 3 and Form 1099-R box 5.
What the IRS tells the payer
From the current instructions, code F is “Charitable gift annuity”. The full instruction text reads: “See Charitable gift annuities, earlier.” It may be used with: None.
How the payment splits
The 1099-R instructions explain the box mechanics directly: “If cash or capital gain property is donated in exchange for a charitable gift annuity, report the total amount distributed during the year in box 1.” Separately: “Report in box 3 any amount from a charitable gift annuity that is taxable as a capital gain.” The taxable amount, which includes the box 3 gain, goes in box 2a, and box 5 can show “the nontaxable part of a charitable gift annuity”, your tax-free return of investment.
Which line it drives
Box 1’s total goes on the pensions and annuities line of Form 1040; the box 3 capital gain amount is reported as a capital gain on Form 8949, Part II, with box F or L checked and “Form 1099-R” entered in column (a), following the Form 8949 instructions for this box.
The 10% additional tax
A charitable gift annuity is a contract you entered into voluntarily in exchange for a charitable donation, not a retirement plan or IRA distribution, so the section 72(t) early-distribution tax framework covered on Form 5329 does not apply to it.
Common mistakes
- Reporting the full box 1 amount as taxable when part of it is a tax-free return of your own donated basis.
- Leaving the box 3 capital gain amount off Form 8949, where the IRS instructions for this box say it is reported.
Box 7 is the payer’s claim, not the law
The code in Box 7a records what the custodian knew when it cut the cheque. It is not a ruling on what you owe, and the IRS instructions say so in as many words. On code 1 the instruction to payers is to use it “even if the distribution is made for medical expenses, health insurance premiums, qualified higher education expenses, a first-time home purchase…” and a list of other genuine statutory exceptions.
Related codes worth reading alongside this one: code Y, and code 9.
Every code in one place: the Box 7 table. If yours looks wrong: how to fix it.
Figures verified against the IRS Instructions for Forms 1099-R and 5498 (2026), the 2026 Form 1099-R, the 2025 Instructions for Form 8949 and 26 U.S.C. 72 on September 30, 2026; the Form 1040 line for the box 1 total was not re-checked.
Sources
- IRS, Instructions for Forms 1099-R and 5498 (2026), Table 1, Guide to Distribution Codes: https://www.irs.gov/instructions/i1099r
- IRS, Instructions for Form 5329 (2025): https://www.irs.gov/instructions/i5329
Code meanings are read from the IRS Instructions for Forms 1099-R and 5498 (current edition, tax year 2026), Table 1, Guide to Distribution Codes, at irs.gov on September 28, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the IRS is the right place to confirm anything consequential.