Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains
Form 2439 is the notice a fund or REIT sends shareholders when it keeps long-term capital gains instead of distributing them, and pays tax on their behalf. Fill in the official IRS PDF below.
This is the genuine IRS PDF, unmodified. Source: IRS official page.
What is 2439?
Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, is issued by regulated investment companies (RICs, such as mutual funds) and real estate investment trusts (REITs) that elect to retain long-term capital gains and pay the tax themselves. The notice tells each shareholder their share of the undistributed gain and the tax the fund paid on it.
As a shareholder, you report your share of the gain on Schedule D even though you never received the cash, claim a credit for the tax the fund already paid, and increase your basis in the shares. The fund files Copy A with the IRS and gives you Copies B and C.
Who files 2439?
- Mutual funds and other regulated investment companies that retain long-term capital gains
- Real estate investment trusts electing to keep gains and pay the tax for shareholders
- Shareholders who receive the notice and must report the gain on their own returns
- Nominees who hold shares for another person and must pass the notice along
How to fill out 2439
- Enter the RIC or REIT’s name, address, and EIN, and the shareholder’s name, address, and identifying number.
- Enter the shareholder’s total undistributed long-term capital gains in box 1a, with the breakouts in boxes 1b through 1d as they apply.
- Enter the tax the fund paid on those gains in box 2.
- Provide Copies B and C to the shareholder by the deadline in the instructions, and keep Copy D for the fund’s records.
- Shareholders: report the box 1a gain on Schedule D, claim the box 2 tax as a payment on your return, attach Copy B, and add the difference to your share basis.
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Frequently asked questions
I got a Form 2439. Do I owe tax on money I never received?
You report the gain, but the fund already paid tax on it for you. You claim that tax as a payment on your return, which often offsets most of the extra tax, and you increase your basis in the shares so you are not taxed twice when you sell.
Where does Form 2439 go on my return?
The undistributed gain goes on Schedule D, and the tax paid by the fund is claimed as a payment, with Copy B attached to your return. Follow the current Schedule D and Form 1040 instructions for exact lines.
How is this different from a 1099-DIV capital gain distribution?
A 1099-DIV reports gains actually paid out to you. Form 2439 covers gains the fund kept. You report both as long-term capital gain, but only Form 2439 comes with a credit for tax the fund paid.