Updated October 19, 2026. Quick answer: Form 2439 is the notice a regulated investment company or real estate investment trust sends when it keeps a long-term capital gain and pays tax on it for you. Box 1a is the total gain, and boxes 1b, 1c and 1d break out special portions of it. The shareholder instructions send the total to the appropriate Schedule D and each portion to its own worksheet or instruction section.
What boxes 1a to 1d report
The form is titled “Notice to Shareholder of Undistributed Long-Term Capital Gains”. Four lines sit side by side in the amounts area. The printed labels are “1a Total undistributed long-term capital gains”, “1b Unrecaptured section 1250 gain”, “1c Section 1202 gain” and “1d Collectibles (28%) gain”. Box 2 sits below them and is covered on its own page, Form 2439 box 2.
The instructions for the shareholder describe the first of these boxes plainly: “This amount is your total undistributed long-term capital gain from your regulated investment company (RIC) or real estate investment trust (REIT).” In other words, the fund or trust kept the gain instead of paying it out, and the form tells you your share of it. A gain a fund pays out in cash is discussed in Form 1099-DIV box 2a.
How boxes 1b, 1c and 1d relate to box 1a
The three smaller boxes are not extra gains added on top of box 1a. The instructions written for the fund or trust say so for each one. For 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.” For box 1d: “Enter the shareholder’s allocable portion of the amount from box 1a attributable to collectibles gain (28% rate gain).” The fund is told to keep the two apart: “Do not include any section 1202 gain in box 1d.”
Those are instructions to the payer, not to you. What they mean for the person reading the form is that each of boxes 1b, 1c and 1d is a slice of the box 1a figure. The shareholder copy of the form says it this way: “If there is an amount in box 1b, 1c, or 1d, special instructions apply for entering those amounts on the appropriate Schedule D.”
What box 1c refers to
Box 1c has the longest description on the payer side. The fund’s instructions say: “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.” The shareholder instructions use shorter words: “This amount applies to the portion of the amount in box 1a attributable to a section 1202 gain (sale of qualified small business stock).”
The payer’s instructions also tell the fund to “attach a statement that reports separately for each designated section 1202 gain” certain details. That attached statement is the fund’s duty, and it is a place to look if box 1c has an amount and you want to see which stock the gain came from.
Where each box goes on the return
The table gives the shareholder instructions for an individual filer, one box at a time. For the form itself, see Schedule D (Form 1040), and for the worksheets, the Unrecaptured Section 1250 Gain Worksheet and the 28% Rate Gain Worksheet each have a page of their own.
| Box | What the shareholder instructions say |
|---|---|
| Box 1a | “Report the total amount as a long-term capital gain on the appropriate Schedule D.” |
| Box 1b | “Individual filers report this amount on line 11 of the Unrecaptured Section 1250 Gain Worksheet in the Schedule D (Form 1040) instructions for 2021 or the applicable line of the worksheet in the instructions for the current year.” |
| Box 1c | “Individual filers, see Exclusion of Gain on Qualified Small Business (QSB) Stock in the Schedule D (Form 1040) instructions.” |
| Box 1d | “Individual filers enter this amount on line 4 of the 28% Rate Gain Worksheet in the Schedule D (Form 1040) instructions for 2021 or the applicable line of the worksheet in the instructions for the current year.” |
Box 1a has a specific line for individuals: “individuals report this amount on line 11, column (h), of Schedule D (Form 1040).” Line 11 is discussed on the Schedule D lines 11 and 12 page. Estates and trusts and corporate shareholders have their own forms. The instructions say “Estates and trusts report this amount on Schedule D (Form 1041).” and “Corporate shareholders report this amount in Part II of Form 8949.” Once the gain is on Schedule D, the tax worksheet that applies depends on the return. See which tax worksheet to use and the capital gains tax calculator for a way to explore the effect.
Current year line numbers
Two of the quoted instructions refer to 2021 line numbers and then add “or the applicable line of the worksheet in the instructions for the current year”. The form was last revised in November 2021, so the line numbers it prints are the ones from the 2021 Schedule D instructions. This page quotes them as printed and does not supply current year line numbers. Use the instructions for the tax year of your own return to find the matching line.
If the form is for an IRA
The payer-side instructions carry a caution: “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.” If your shares sit inside an IRA, then, the form is sent to the trustee or custodian and not to you. The form also has a rule for the identifying number: “If a shareholder is an IRA, enter the identification number of the IRA trust.” The related refund route for IRA trustees is covered with Form 2439 box 2.
If you hold the shares for someone else
The shareholder instructions address nominees directly: “If you are not the actual owner of the shares for which this form is issued, you must do the following.” The steps include completing a new set of forms for each owner and giving the owner Copies B and C. Anyone in that position should read the full nominee list printed on Copy C. The sibling pages on this form and on Form 1099-CAP boxes 1 to 5 use the same box by box approach.
Edition and box numbers
The edition used for this page is Form 2439 (Rev. November 2021), with its instructions for the shareholder on Copies B and C. Check the year and edition printed on the form you received, because box numbers can change between editions.
Common mistakes
- Reporting only part of box 1a. The instructions say “Report the total amount as a long-term capital gain on the appropriate Schedule D.”
- Adding boxes 1b, 1c and 1d on top of box 1a. The payer instructions describe each as “the shareholder’s allocable portion of the amount from box 1a”.
- Using a 2021 line number on a later return. The instructions allow “the applicable line of the worksheet in the instructions for the current year”.
Related: Schedule D (Form 1040), the Unrecaptured Section 1250 Gain Worksheet, the 28% Rate Gain Worksheet, Schedule D lines 11 and 12, and the capital gains tax calculator.
Sources
- Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains (Rev. November 2021), with Instructions for the Shareholder: https://www.irs.gov/pub/irs-pdf/f2439.pdf
- IRS: About Form 2439: https://www.irs.gov/forms-pubs/about-form-2439
Read from the IRS documents linked above on October 19, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.