Undistributed Capital Gains – Form 2439

 

A mutual fund usually distributes all its capital gains to its shareholders. The mutual fund company reports these gains on Form 1099-DIV. However, a mutual fund might keep some of its capital gains and pay a tax on them. When this happens, the mutual fund company will send you a Form 2439: Notice to Shareholders of Undistributed Long-Term Capital Gains.

Report these capital gains even though you don’t actually receive them. However, since the mutual fund paid tax on the gains, you can claim a credit for the taxes they pay.

You also need to increase the basis of your mutual fund shares by the difference between these two items:

  • Amount of undistributed capital gains you report
  • Amount of taxes reported to you as paid

Related Topics

Related Resources

Capital Gains Tax On Real Estate

Learn more about capital gains tax on real estate with advice from the tax experts at H&R Block.

How To Calculate A Capital Gain On Property

Do you need to know how to calculate a capital gain on inherited property that was later sold? Learn more from the tax experts at H&R Block.

Dividend Reinvestment

Learn more about mutual fund and stock dividend reinvestments from the tax experts at H&R Block.

Is Work-Study Income Taxable?

Is your work-study income considered taxable by the IRS? Learn more from the tax experts at H&R Block.