Form 2439

IRS Tax Form 2439

Notice to Shareholder of Undistributed Long-Term Capital Gains

Instructions for reporting

Box 1a. This amount is your total undistributed long-term capital gain from your regulated investment company (RIC) or real estate investment trust (REIT). Report the total amount as a long-term gain on the appropriate Schedule D. For example, individuals enter this amount on line 11, column (f), of Schedule D (Form 1040). Estates and trusts enter this amount on line 7, column (f), of Schedule D (Form 1041). Corporate filers enter this amount on line 6, Schedule D (Form 1120). If there is an amount in box 1b, 1c, or 1d, special instructions apply for entering those amounts on the appropriate Schedule D. See Undistributed Capital Gains in the Schedule D (Form 1040) and Schedule D (Form 1041) instructions.

Box 1b. This amount is the unrecaptured section 1250 gain. Individual filers and estates and trusts report this amount on line 11 of the Unrecaptured Section 1250 Gain Worksheet in the Schedule D instructions.
Box 1c. This amount applies to the portion of the amount in box 1a attributable to a section 1202 gain (sale of qualified small business stock). Individual filers, estates and trusts, see Exclusion of Gain on Qualified Small Business (QSB) Stock in the Schedule D instructions.

Box 1d. This amount is the collectibles gain (28% rate gain), portion of the amount in box 1a. Individual filers enter this amount on line 4 of the 28% Rate Gain Worksheet in the Schedule D (Form 1040) instructions. Estates and trusts enter this amount on line 4 of the 28% Rate Gain Worksheet in the Schedule D (Form 1041) instructions.
Box 2. This box contains the tax paid by the RIC or REIT on the undistributed long-term capital gains shown in box 1a. You can apply for a refund or credit of this tax as follows.

Individuals, Nonresident Aliens, and Estates and Trusts. See line 70 of Form 1040, line 64 of Form 1040NR, or line 24g of Form 1041, and the related instructions. Corporations (other than S Corporations). See line 32f(1) of Form 1120 (line 28f(1) of Form 1120-A) or line 5f of Form 1120-F, and the related instructions. All other corporations report this amount on the line designated as “Credit for tax paid on undistributed capital gains.”

S Corporations, Partnerships, and Electing Large Partnerships. See the Specific Instructions for (Schedules K and K-1, Part III) (Form 1120S and 1065) for details on reporting each item to the shareholders and partners. For Electing Large Partnerships (ELPs), see the line 28 Instructions for Form 1065-B.

Exempt Organizations and Certain Trustees. See the instructions for Form 990-T if it is filed by:

• Organizations exempt from tax under section 501(a) filing Form 990-T to claim their refund of income tax paid on undistributed long-term capital gains, or
• Trustees for individual retirement arrangements (IRAs) described in section 408 (including accounts described in section 408(h)) filing a single composite Form 990-T to claim the refund referred to above.

Quick Links

• Form 2439 (pdf)
• Form 2439 Instructions (pdf)

Dividends

Capital gain distributions are paid by regulated investment companies, mutual funds, and real estate investment trust (REITs). Capital gain distributions are always reported as long-term capital gains. You must also report any undistributed capital gain that mutual fund or REIT credited to you. This undistributed gain is reported to you on Form 2439. See more about dividends in this American Tax Encyclopedia.

FORM 2439: REPORTING UNDISTRIBUTED LONG-TERM CAPITAL GAINS FOR 2002-2003

RICs and REITs filing the 2002 Form 2439 for fiscal years ending after May 5, 2003, must provide additional information with their notices to shareholders. Filers must provide to shareholders the amount of post-May 5, 2003, undistributed long-term capital gains, and indicate that this amount must be reported on Schedule D (Form 1040), line 11, column (g) (or on Schedule D (Form 1041), line 7, column (g)). Filers determine this amount by figuring the amount that would be reported in box 1a taking into account only the part of the fiscal year after May 5, 2003.

The smaller of that amount or the amount reported in box 1a is the amount of post-May 5, 2003, undistributed long-term capital gain to provide to shareholders. Filers may provide this additional information to shareholders on a substitute statement or on a separate statement. Do not report this additional information on 2002 Forms 2439 filed with the IRS. Filers must continue to report the total undistributed long-term capital gains for the entire tax year in box 1a of Form 2439. Also, the amount reported as qualified 5-year gain must be figured taking into account only the portion of the tax year before May 6, 2003.