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Form 2439 – If you’re a shareholder in a regulated investment company (RIC) or real estate investment trust (REIT), you might receive IRS Form 2439. This form reports undistributed long-term capital gains and the taxes already paid on them by the RIC or REIT. Understanding Form 2439 is crucial for accurate tax reporting, as it allows you to claim a credit or refund for those taxes while including the gains in your income. In this comprehensive guide, we’ll cover everything you need to know about IRS Form 2439, including its purpose, instructions, and how to report it on your tax return.
What is IRS Form 2439?
IRS Form 2439, officially titled “Notice to Shareholder of Undistributed Long-Term Capital Gains,” is a tax document used to notify shareholders about long-term capital gains that a RIC or REIT has not distributed but has paid taxes on. These entities can elect to retain certain capital gains instead of distributing them, paying the corporate tax rate on behalf of shareholders. The form provides details on these gains and the tax paid, enabling shareholders to report the income correctly and claim the associated tax credit.
This form is essential for tax compliance under Internal Revenue Code sections 852(b)(3)(D) for RICs and 857(b)(3)(C) for REITs. It comes in four copies: A for the IRS, B to attach to your tax return, C for your records, and D for the issuer’s records.
Who Issues and Receives Form 2439?
Who Issues It?
Form 2439 is issued by regulated investment companies (RICs), such as mutual funds, and real estate investment trusts (REITs). These organizations must complete the form for each shareholder entitled to a portion of the undistributed long-term capital gains on which they’ve paid tax.
Who Receives It?
Shareholders of RICs or REITs receive Copies B and C of Form 2439 if the entity has undistributed capital gains allocated to them. This includes individuals, estates, trusts, corporations, partnerships, S corporations, exempt organizations, and even nominees or IRA trustees. If you’re an IRA owner, the form goes to your trustee or custodian, not directly to you.
Purpose of IRS Form 2439
The primary purpose of Form 2439 is to:
- Inform shareholders of their share of undistributed long-term capital gains.
- Report the tax already paid by the RIC or REIT on those gains.
- Allow shareholders to include the gains in their taxable income while claiming a credit for the prepaid tax.
This process ensures that capital gains are taxed appropriately without double taxation, as the shareholder gets credit for the corporate-level tax paid.
Boxes on Form 2439 Explained
Form 2439 includes several key boxes that detail the gains and taxes:
| Box | Description |
|---|---|
| 1a | Total undistributed long-term capital gains allocated to the shareholder. Report this as a long-term capital gain on Schedule D or Form 8949. |
| 1b | Unrecaptured section 1250 gain (from depreciable real property). Use this in the Unrecaptured Section 1250 Gain Worksheet. |
| 1c | Section 1202 gain (from qualified small business stock). May qualify for exclusion; attach a statement with details if applicable. |
| 1d | Collectibles (28% rate) gain. Enter on the 28% Rate Gain Worksheet. |
| 2 | Tax paid by the RIC or REIT on the box 1a amount. Claim this as a credit or refund on your return. |
Your identifying number (SSN or EIN) may be truncated on Copies B and C for privacy, but the full number is reported to the IRS.
Instructions for Shareholders: How to Report Form 2439?
As a shareholder, follow these steps to handle Form 2439:
- Report the Gains: Include the amount from box 1a as a long-term capital gain on your tax return. For individuals, this goes on line 11 of Schedule D (Form 1040). Estates and trusts use Schedule D (Form 1041), while corporations report on Form 8949.
- Handle Special Gains:
- Box 1b: Enter on the Unrecaptured Section 1250 Gain Worksheet.
- Box 1c: Apply any eligible exclusion for qualified small business stock.
- Box 1d: Enter on the 28% Rate Gain Worksheet.
- Claim the Tax Credit: Use box 2 to claim a credit for the tax paid.
- Individuals: Schedule 3 (Form 1040), line 13a.
- Estates/Trusts: Schedule G (Form 1041), line 16a.
- Corporations: Schedule J (Form 1120), line 20a (or equivalent for other corporate forms).
- S Corps/Partnerships: Report via Schedules K and K-1.
- Exempt Organizations/IRAs: File Form 990-T to claim the refund.
Attach Copy B to your tax return. Keep Copy C for your records.
Instructions for RICs and REITs: How to File Form 2439?
If you’re a RIC or REIT:
- Complete all four copies for each qualifying shareholder.
- Attach Copy A to your Form 1120-RIC or Form 1120-REIT when filing.
- Send Copies B and C to the shareholder (or IRA trustee) within 60 days after your tax year ends.
- Retain Copy D.
Use data from Form 2438 (Undistributed Capital Gains Tax Return) for boxes 1a–1d and 2. Truncate shareholder identifying numbers on Copies B and C only.
Special Rules for Nominees
If you’re a nominee (not the actual owner), redistribute the form to the true owners within 90 days (or 70/150 days in specific cases). File the adjusted forms with the IRS and mark them as “Nominee.”
Filing Requirements and Deadlines
- Issuers: File Copy A with your corporate return; furnish shareholder copies by the 60th day post-tax year.
- Shareholders: No separate filing for Form 2439 itself—report on your income tax return and attach Copy B.
- Electronic Filing: Not typically required for this form, but check IRS guidelines for large volumes.
Recent Updates to Form 2439
As of 2026, there are no recent developments or revisions to Form 2439. The current version is from November 2021, but always verify on IRS.gov for the latest PDF.
You can download the latest version of IRS Form 2439 (Notice to Shareholder of Undistributed Long-Term Capital Gains), which includes the filing instructions directly within the PDF document, from the official IRS website here: https://www.irs.gov/pub/irs-pdf/f2439.pdf.
For additional details, recent updates (none as of now), and prior year versions, visit the IRS “About Form 2439” page: https://www.irs.gov/forms-pubs/about-form-2439.
Frequently Asked Questions About IRS Form 2439
What if I don’t receive Form 2439?
Contact your RIC or REIT. They are required to send it if applicable.
Can I e-file with Form 2439 attached?
Yes, but you may need to mail Copy B if e-filing doesn’t support attachments.
How does Form 2439 affect my taxes?
It increases your capital gains income but provides a credit for taxes already paid, potentially reducing your overall tax liability.
Is Form 2439 the same as a 1099?
No—1099 forms report distributed income, while 2439 covers undistributed gains.
For more details, download the official Form 2439 PDF from IRS.gov.
This guide ensures you’re equipped to handle IRS Form 2439 confidently. Always consult a tax professional for personalized advice, as tax laws can be complex.