Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, is issued by Regulated Investment Companies (RICs) and Real Estate Investment Trusts (REITs) to report long-term capital gains that weren't distributed to shareholders. Even though you didn't receive the money directly, you may still need to report the income and claim any related tax credit on your tax return.
What Is Reported on Form 2439?
Form 2439 reports undistributed long-term capital gains and any tax paid on those gains by the RIC or REIT on your behalf. Each box on the form may need to be reported differently on your tax return.
How Do I Report Box 1a?
Box 1a shows your total undistributed long-term capital gain from the RIC or REIT.
Report this amount as a long-term capital gain on Schedule D. In the program, navigate to:
- Federal
- Income
- Investments
- Stocks, Mutual Funds, Cryptocurrency, Collectibles, etc.
- Enter the transaction manually:
- Select Enter Sales One by One (Classic and Premium accounts only)
- Enter Form 2439 as the description
- Report the transaction as a long-term capital gain
What Is Box 1b?
Box 1b reports unrecaptured Section 1250 gain.
Individual taxpayers generally report this amount on the Unrecaptured Section 1250 Gain Worksheet included with the Schedule D instructions for the applicable tax year.
What Is Box 1c?
Box 1c is the portion of Box 1a that is attributable to a Section 1202 gain, which relates to the sale of qualified small business stock (QSB stock).
If Box 1c contains an amount, review the Schedule D instructions for the current tax year to determine whether any portion of the gain may qualify for an exclusion.
What Is Box 1d?
Box 1d reports the collectibles gain portion of the amount shown in Box 1a, sometimes referred to as a 28% rate gain.
Individual taxpayers generally enter this amount on the 28% Rate Gain Worksheet found in the Schedule D instructions for the applicable tax year.
How Do I Report Box 2?
Box 2 shows the tax already paid by the RIC or REIT on the undistributed long-term capital gain reported in Box 1a.
You may be able to claim this amount as a payment or refundable credit on your tax return.
To enter Box 2 in the program:
- Federal
- Payments & Estimates
- Other Payments or Refundable Credits
- Shareholder's Undistributed Long-Term Capital Gains
Enter the Box 2 amount exactly as shown on your Form 2439.
Important Notes
- Form 2439 is most commonly issued by mutual funds, exchange-traded funds (ETFs), and REITs that retain long-term capital gains rather than distributing them to shareholders.
- Even if you did not receive a cash distribution, the gain reported on Form 2439 is generally taxable and must be reported on your return.
- Keep Form 2439 with your tax records, as you'll need the information from all applicable boxes when preparing your return.