Some mutual funds and REITs keep their long-term gains and paytax on them, rather than distributing them to shareholders. If you'veinvested in one of these, you'll receive an IRS Form 2439, Noticeto Shareholder of Undistributed Long-Term Capital Gains. AttachCopy B to your Form 1040.
Your undistributed capital gainswill appear in Box 1a of the Form 2439, and it will be reported onLine 11 of Schedule D. You can claim a tax credit for the amountof tax paid by the fund or REIT on Line 73 of your Form 1040. Justcheck Box "a" indicating that the payment was shown on Form 2439.
 | Save Money You should also keep a copy of Form2439, Notice to Shareholder of Undistributed Long-Term CapitalGains in your records, so that when you sell the investment, youcan increase its tax basis by the difference between the gain youreported over the years, and the tax credit you claimed. If you do,it will reduce the amount of capital gains you report for the sale. |
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