Edit
Fill out
Sign
Export or Print
IRS Form 2439

Purpose and Main Objectives

In the United States of America, as in other countries, there are different tax laws. In this regard, the US Internal Revenue Service introduces a mandatory obligation for the local entrepreneurs, business companies, private owners, and stockholders to pay taxes on time by filling out and submitting the relevant forms.

This form is an official tax document for undistributed long-term capital gains that shareholders are required to complete. This issue is regulated by Investment companies or Real Estate Investment Trusts that distribute tax forms and related documents to shareholders in the United States. These structural services distribute most of the capital gains to shareholders, who report their income on an additional form 1099-DIV.

On the other hand, the Stock Company has the right to keep these earnings as well. In this case, it is obliged to pay taxes on behalf of the shareholders, notifying them of their operation on additional application 2439.

As for the term itself, long-term capital gains are gains from qualifying investments held by shareholders for more than 12 months before the selling. The sale amount of an asset is the difference between the sale price and the purchase price, or the amount of money that the investor purchases. Long-term capital gains are assigned a lower tax rate than short-term capital gains in the United States.

General Rules and Requirements

The US Internal Revenue Service, together with Investment Companies and trusts, regulates the taxation and distribution of this form to shareholders. According to the rules, stock companies and trusts must distribute almost all profits to investors and shareholders (the so-called capital gains distribution). Typically, these stock structures accumulate profit gains from November to December, warning shareholders.

Investors may submit an additional form if they keep their shares in tax-free accounts. This method allows you to recover the amount of tax already paid by the stock company. Shareholders subject to federal taxation are required to adjust their base for shares upward. They first deduct the taxes that the stock company has already entered on the form and add this difference to the original amount.

When filling out this application, the stock companies must provide all reliable information and fill in the appropriate copies (A, B, C, and E) for each shareholder. Further, they must attach a copy A of all applications to the additional documents when it is already in the service center. You must provide the corresponding copies of B and C by the 60th day after the end of the tax year and keep the copy of D.

Benefits and Drawbacks

Like other official tax documents, the long-term capital gains form has its advantages and disadvantages. Read their contents carefully to understand some of the implications more clearly.

As a rule, the net result of the distribution of profit gains is not different from the usual one. When distributing this increase, the shareholder receiving the capital gains dividend in cash pays taxes on this profit. Next, this person re-invests the resulting balance in new shares. Perhaps one difference between these two operations and concepts is that a stock company pays a higher tax rate on profits. An individual, on the contrary, may pay the amount at a low tax rate. This calculation is due to the high income of the company itself. In general, the shareholder thus gets an advantage in the form of a difference in the amount.

What Documents Are Required?

Except for the long-term capital gains form itself, you must complete the accompanying applications:

  • Form 1120-REC for Investment Company Taxation
  • Form 1120-REIT for Investment Trust Tax Payments
  • Form 2438 for Retained Capital Gains Tax

Fill out the applications carefully, indicating the complete information without lying. In other cases, the tax authorities may not accept your documents or even fine you.

Other IRS Forms for Business

To make sure you haven’t missed out on anything important when analyzing what IRS forms you need to file, read about other IRS forms for businesses.


How to Fill out Form 2439

Filling out this application requires reliable information and mathematical calculations for the accuracy of the tax payment. Therefore, consider the instructions below and take into account all its requirements.

1. Provide the Basic Information

All four copies (A, B, C, and E) have the same structure. Specify the name, legal and postal address of the employer, as well as its identification number. An identification number is a digital code that identifies a specific organization for establishing tax payments and submitting tax returns. This number allows identifying the company for the Tax Service that deals with tax issues. Don’t forget to provide the identification code, name, and address of the shareholder, including the social security number.

step 1 - provide the basic information - filling out irs form 2439

2. Define the Accounting Calendar Year

In the upper right corner, write the calendar year for which the tax return is submitted. Enter the appropriate dates in the lines. The shareholder of the individual pension agreement must send B and C copies to the trustee. Check the correctness of the entered data several times to avoid misunderstandings.

step 2 - define the accounting calendar year - filling out irs form 2439

3. Insert the Tax Payment Amount

Enter the required amounts in the corresponding lines. We recommend that you calculate your tax payments in advance to avoid mistakes. In the first line, specify the total amount of retained long-term capital gains. Next, enter the data according to the proposed scheme. Please note that you must attach this copy to the additional forms 1120-REC and 1120-REIT. If necessary, use our form-building software.

step 3 - insert the tax payment amount - filling out irs form 2439

4. Fill in Additional Copies

As already noted, this form consists of four copies. Their structure is the same, but their purpose is different. When filling out the form, you must attach a copy of B to the shareholder’s income tax return for a specific period. You also mark the profit in the lines, including the 28 percent rate increase. Enter the organization’s data and your information.

step 4.1 - fill in additional copies - filling out irs form 2439

Copy C is intended for the accounting of shareholders. By the way, if you are the actual owner of the shares for which issued this form, do the following:

  • Complete Copies A, B, C, and D of this form for each owner of shares;
  • Enter your name as “candidate” in the corresponding line, and the address;
  • In Copy B, put your name and attach it to the first copy;
  • Apply the second copy to the Center of the internal revenue;
  • Identify the owner of the shares in the executed copy.

According to the rules, the candidate has about 90 days to complete these items. If you are a candidate and at the same time a resident of a foreign country, you have 150 days. Copy D applies to Investment companies and trust funds.

step 4.2 - fill in additional copies - filling out irs form 2439
and
step 4.3 - fill in additional copies - filling out irs form 2439