Form 2439 Notice to Shareholder of Undistributed Long-Term Capital

2006 Form 2439
Notice to Shareholder of
Undistributed Long-Term Capital Gains

Purpose:

This is the first circulated draft of the 2006 Form 2439, for your review and
comments. The major changes are discussed below.

TPCC meeting:

None, but you may request one by contacting John R. Nelson.

Prior Version:

The 2005 Form 2439 is available at:
http://www.irs.gov/pub/irs-pdf/f2439.pdf

Other products: Circulations of draft tax forms, instructions, notices, and publications are posted
at:
http://taxforms.web.irs.gov/draft_products.html.

Comments:

Please email, fax, or call, any comments by June 09, 2006.

Major Changes for 2006 Form 2439
•
•

We moved “Caution” item from the back of Copy C, to the back of Copy A. It
belongs with the Instructions for the RIC and REIT, whereas previously it was
included with the instructions for the shareholder.
There are no other major changes for 2006.

Action
TLS, have you
transmitted all R
text files for this
cycle update?

Date

O.K. to print

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

VOID

CORRECTED
OMB No. 1545-0145

2006

Revised proofs
requested

(99)

Notice to Shareholder of Undistributed
Long-Term Capital Gains
For calendar year 2006, or other tax year of the
regulated investment company (RIC) or the
real estate investment trust (REIT)

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Form

2439

beginning

, 2006, and

ending

, 20

Identification number of RIC or REIT

1a Total undistributed long-term capital gains

Shareholder’s identifying number

1b Unrecaptured section 1250 gain

Shareholder’s name, address, and ZIP code

1c Section 1202 gain

2

2439

Signature

1

Page 1 of 8 of Form 2439

Name, address, and ZIP code of RIC or REIT

Form

Date

Attach to
Form 1120-RIC
or Form 1120-REIT

1d Collectibles (28%) gain

Tax paid by the RIC or REIT on the box 1a gains

Cat. No. 11858E

Copy A

For Instructions
and Paperwork
Reduction Act
Notice, see back of
Copies A and D.

Department of the Treasury - Internal Revenue Service

Page 2 of 8 of Form 2439

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Instructions for the Regulated Investment
Company (RIC) and the Real Estate Investment
Trust (REIT)

RIC’s or REIT’s name, address, and identification number.
Type or print the name and address (including ZIP code) and the
employer identification number (EIN) of the RIC or REIT as
shown on Form 2438, Undistributed Capital Gains Tax Return.

Section references are to the Internal Revenue Code.

Shareholder’s identifying number, name, and address. Type
or print the shareholder’s social security number (SSN), name,
and address (including ZIP code). If the shareholder is other than
an individual, enter the EIN. If a shareholder is an IRA, enter the
identification number of the IRA trust. Do not enter the SSN of
the person for whom the IRA is maintained.
Box 1a. Enter the amount of undistributed capital gains from line
11, Form 2438, allocable to the shareholder.

Reporting Information
1. Complete Copies A, B, C, and D for each shareholder for
whom the regulated investment company (RIC) or real estate
investment trust (REIT) paid tax on undistributed capital gains
under section 852(b)(3)(D) or 857(b)(3)(D).
2. Attach Copy A of all Forms 2439 to Form 1120-RIC or Form
1120-REIT when it is filed at the appropriate IRS service center.
3. Furnish Copies B and C of Form 2439 to the shareholder by
the 60th day after the end of the RIC’s or the REIT’s tax year.
4. Retain Copy D for the RIC’s or REIT’s records.

CAUTION

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For a shareholder that is an individual retirement
arrangement (IRA), send Copies B and C to the
trustee or custodian of the IRA. Do not send copies
to the owner of the IRA.

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.
(Continued on the back of Copy D.)

Page 3 of 8 of Form 2439

1

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

VOID
Name, address, and ZIP code of RIC or REIT

CORRECTED
OMB No. 1545-0145

2006

Notice to Shareholder of Undistributed
Long-Term Capital Gains
For calendar year 2006, or other tax year of the
regulated investment company (RIC) or the
real estate investment trust (REIT)

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Form

2439

beginning

, 2006, and

ending

, 20

Identification number of RIC or REIT

1a Total undistributed long-term capital gains

Shareholder’s identifying number

1b Unrecaptured section 1250 gain

Shareholder’s name, address, and ZIP code

1c Section 1202 gain

2

Form

2439

1d Collectibles (28%) gain

Tax paid by the RIC or REIT on the box 1a gains

Copy B
Attach to the
shareholder’s
income tax return
for the tax year
that includes the
last day of the
RIC’s or REIT’s
tax year.

Department of the Treasury - Internal Revenue Service

Page 4 of 8 of Form 2439

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

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 (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 24f of
Form 1041, and the related instructions.

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(Continued on the back of Copy C.)

Page 5 of 8 of Form 2439

1

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

VOID
Name, address, and ZIP code of RIC or REIT

CORRECTED
OMB No. 1545-0145

2006

Notice to Shareholder of Undistributed
Long-Term Capital Gains
For calendar year 2006, or other tax year of the
regulated investment company (RIC) or the
real estate investment trust (REIT)

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Form

2439

beginning

, 2006, and

ending

, 20

Identification number of RIC or REIT

1a Total undistributed long-term capital gains

Shareholder’s identifying number

1b Unrecaptured section 1250 gain

Shareholder’s name, address, and ZIP code

1c Section 1202 gain

2

Form

2439

1d Collectibles (28%) gain

Copy C
For shareholder’s
records.

Tax paid by the RIC or REIT on the box 1a gains

Department of the Treasury - Internal Revenue Service

Page 6 of 8 of Form 2439

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Instructions for the Shareholder ( Continued)
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 27 Instructions for Form
1065-B.
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.

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. 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. (If you are a resident of a foreign country, file
with the Internal Revenue Service Center, Philadelphia, PA
19255.)
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.

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

Page 7 of 8 of Form 2439

1

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

VOID
Name, address, and ZIP code of RIC or REIT

CORRECTED
OMB No. 1545-0145

2006

Notice to Shareholder of Undistributed
Long-Term Capital Gains
For calendar year 2006, or other tax year of the
regulated investment company (RIC) or the
real estate investment trust (REIT)

f
o
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Form

2439

beginning

, 2006, and

ending

, 20

Identification number of RIC or REIT

1a Total undistributed long-term capital gains

Shareholder’s identifying number

1b Unrecaptured section 1250 gain

Shareholder’s name, address, and ZIP code

1c Section 1202 gain

2

Form

2439

1d Collectibles (28%) gain

Tax paid by the RIC or REIT on the box 1a gains

Copy D
For records of the
regulated
investment
company or the
real estate
investment trust.

Department of the Treasury - Internal Revenue Service

Page 8 of 8 of Form 2439

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Instructions for the RIC and the REIT
( Continued)
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 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.

to ensure that you are complying with these laws and to allow
us to figure and collect the right amount of tax.
You are not required to provide the information requested on a
form that is subject to the Paperwork Reduction Act unless the
form displays a valid OMB control number. Books or records
relating to a form or its instructions must be retained as long as
their contents may become material in the administration of any
Internal Revenue law. Generally, tax returns and return
information are confidential, as required by section 6103.
The time needed to complete and file this form will vary
depending on individual circumstances. The estimated average
time is:
Recordkeeping
3 hr., 6 min.
Learning about the
law or the form
47 min.
Preparing and sending
the form to the IRS
52 min.
If you have comments concerning the accuracy of these time
estimates or suggestions for making this form simpler, we would
be happy to hear from you. You can write to the IRS at the
address listed in the Instructions for Form 1120-RIC or Form
1120-REIT.

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Paperwork Reduction Act Notice. We ask for the information
on this form to carry out the Internal Revenue laws of the United
States. You are required to give us the information. We need it

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