Form 2439 - Notice to Shareholder of Undistributed Long-Term Capital Gains

Instructions for the Shareholder
Section references are to the Internal Revenue Code.

Reporting Information
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 (h), of Schedule D (Form 1040). Estates and trusts enter this amount on line 7, column (f), of Schedule D (Form 1041).

Corporate shareholders 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 and 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 amount is 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 13a of Schedule 3 (Form 1040 or 1040-SR); line 69a of Form 1040-NR; or Schedule G, line 16a of Form 1041, and the related instructions.

Corporations (other than S corporations). See Schedule J, line 20a of Form 1120 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 and partnerships. See the Specific Instructions for Schedules K and K-1, Part III (Forms 1120-S and 1065) for details on reporting each item to the shareholders and partners.

Exempt organizations and certain trustees. See the Instructions for Form 990-T if it is filed by:

1. 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

2. 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.

Nominees. If you are not the actual owner of the shares for which this form is issued, you must do the following.

1. Complete Copies A, B, C, and D of Form 2439 for each owner.  The total undistributed long-term capital gains entered in box 1a; the amounts entered in boxes 1b, 1c, and 1d and the tax shown in box 2 on the Form 2439 for each owner must agree with the amounts on Copy B that you received from the RIC or REIT.

2. Enter your name as “Nominee” and your address in the block for the RIC’s or REIT’s name and address, and the RIC’s or REIT’s name and address in the same block.

3. Write “Nominee” in the upper right corner of the Copy B you received from the RIC or REIT and attach it to the Copy A you completed.

4. File the Copy B you received (with an attached Copy A) with the Internal Revenue Service Center where you file your income tax return.

5. Give the actual owner Copies B and C of the forms you complete.

6. Copy D is to be maintained by the RIC or REIT.

A nominee has 90 days after the close of the RIC’s or REIT’s tax year to complete items 1 through 5 above. However, a nominee acting as a custodian of a unit investment trust described in section 851(f)(1) has 70 days. A nominee who is a resident of a foreign country has 150 days.

Box 1b. Enter the shareholder’s allocable portion of the amount from box 1a that has been designated as unrecaptured section 1250 gain from the disposition of depreciable real property.

Box 1c. The section 1202 gain is the portion of box 1a that is attributable to the sale or exchange by the RIC of qualified small business stock issued after August 10, 1993, and held for more than 5 years. Enter the shareholder’s allocable portion of the amount from box 1a attributable to a section 1202 gain. In addition, attach a statement that reports separately for each designated section 1202 gain the following information: the amount of the section 1202 gain, the name of the corporation that issued the stock, the dates on which the RIC acquired and sold the stock, and the shareholder’s portion of the RIC’s adjusted basis and sales price of the stock.

Box 1d. Enter the shareholder’s allocable portion of the amount from box 1a attributable to collectibles gain (28% rate gain). Do not include any section 1202 gain in box 1d.

Box 2. Enter the tax paid on the amount in box 1a.

Future developments. For the latest information about developments related to Form 2439 and its instructions, such as legislation enacted after they were published, go to www.irs.gov/Form2439.