Undistributed capital gains are reported to mutual fund shareholders when the mutual fund retains some of its long-term capital gains and pays taxes on the undistributed amounts. The taxpayer treats their share of these gains as distributions, even though they did not actually receive them. However, they are not included on Form 1099-DIV. The amounts are reported to the taxpayer on Form 2439.
A corporation receiving Form 2439 has two entries to make in its tax return, one to report the capital gain and the other to report the tax paid.
To enter the tax paid and other information reported on Form 2439 in the corporation return in TaxSlayer Pro, from the Form 1120 Tax Menu select:
- Tax and Payments
- Total Payments and Refundable Credits
- Credit Regulated Invest (2439) - Select New and enter the information from Form 2439.
To enter the capital gain, from the Form 1120 Tax Menu select:
- Income
- Capital Gain Net Income
- Enter/Edit Capital Gain/Loss - Select New and enter the following information:
- Description of Property - Enter "FROM FORM 2439".
- Form 1099-B Type - Choose "Form 1099-B Not Received".
- Date Acquired - Choose "Various - Long-Term".
- Date Sold - Enter the last day of the year.
- Sales Price - Enter the amount on Form 2439 Box 1a.
- Cost - Leave blank.
Select OK, then in the next menu select Exit.
For the corporate taxpayer, any amount reported in Form 2439 box 1b, 1c, or 1d is informational and isn't entered anywhere in the corporate tax return.
Additional Information:
Schedule D (Form 1120) instructions
TaxSlayer Pro strives to keep the information on this page timely and accurate but makes no promise or guarantee about the timeliness, accuracy, or completeness of the contents of this page. This is general information and is not intended to be tax advice. You are encouraged to also review the underlying state resources and publications.