Fillable Form 2438

What is Form 2438?

Form 2438, Undistributed Capital Gains Tax Return, is an Internal Revenue Service (IRS) form used by Regulated Investment Companies (RICs) and Real Estate Investment trusts (REITs) in the United States to figure income tax on undistributed capital gains designated under section 852(b)(3)(D) or section 857(b)(3)(D).

The term capital gain refers to the increase in the value of a capital asset when it is sold. Form 2438 must be signed and dated by:

• The president, vice president, treasurer, assistant treasurer, chief accounting officer of the RIC or REIT.
• Any other corporate officer (such as tax officer) authorized to sign.

If a return is filed on behalf of a RIC or REIT by a receiver, trustee, or assignee, that fiduciary must sign the return, instead of the corporate officer. A RIC or REIT that doesn’t pay the tax when due may generally be penalized 1/2 of 1% of the unpaid tax for each month or part of a month the tax is not paid, up to a maximum of 25% of the unpaid tax. If the RIC or REIT can provide proof that the failure to pay on time was due to reasonable cause.

Who needs to use Form 2438?

IRS Form 2438 must be used by RICs or REITs to figure income tax on undistributed capital gains designated under section 852(b)(3)(D) or section 857(b)(3)(C).

How to fill out Form 2438?

Form 2438 is a very simple form to fill out. Be sure to download it in PDF format so as to ensure that the contents and all information entered will remain intact regardless of how the form was submitted. It will also be beneficial to have the relevant documents prepared to make sure that all information entered is updated and correct. If more details on particular steps of the form are required, you may consult the instructions on pages 2 to 3 on this form.

Calendar and Tax Year

Enter the calendar year and tax year that you are filing this form for.

Name of Fund or REIT

Enter the name of the fund or the REIT.

Employer Identification Number

Enter the RIC or REIT’s Employer Identification Number (EIN)

Number, Street, and Room or Suite Number

Enter the RIC or REIT’s number, street, and room or suite number of the filer. If the local post office does not deliver mail to the given street address, enter their P.O. box number as well.

City or Town, State, and ZIP code

Enter the RIC or REIT’s city or town, state, and ZIP code.

Part I - Short-Term Capital Gains and Losses - Assets Held One Year or Less

Line 1 - Column a

Enter a short description of each property.

Line 1 - Column b

Enter the date that each property was acquired.

Line 1 - Column c

Enter the date that each property was sold.

Line 1 - Column d

Enter the sales price of each property.

Line 1 - Column e

Enter the cost or other basis for each property.

Line 1 - Column f

Subtract Column e from Column d and enter the difference.

Line 2

Enter the amount of short-term capital gain from installment sales from Form 6252, Line 26 or 37.

Line 3

Enter the amount of unused capital loss carryover and attach the computations done to determine that amount.

Line 4

Add each amount in Line 1, Column f, Line 2, and Line 3, and enter the sum.

Part II - Long-Term Capital Gains and Losses - Assets Held More Than One Year

Line 5 - Column a

Enter a short description of each property.

Line 5 - Column b

Enter the date that each property was acquired.

Line 5 - Column c

Enter the date that each property was sold.

Line 5 - Column d

Enter the sales price of each property.

Line 5 - Column e

Enter the cost or other basis for each property.

Line 5 - Column f

Subtract Column e from Column d and enter the difference.

Line 6

Enter the amount of gain from Form 4797, column g, Line 7 or 9.

Line 7

Enter the amount of long-term capital gain from installment sales from Form 6252, Line 26 or 37.

Line 8

Add Line 5, Column f, Line 6, and Line 7, and enter the sum.

Part III - Summary of Parts I and II

Line 9a

Enter the amount of excess net long-term capital gain (Line 8) over net short-term capital loss (Line 4).

Line 9b

Enter the amount of capital gain dividends.

Line 10

Subtract Line 9b from Line 9a and enter the difference.

Line 11

Enter the amount of undistributed capital gains on Line 10 designated under section 852(b)(3)(D) or 857(b)(3)(C).

Line 12

Subtract Line 11 from Line 10 and enter the difference.

Line 13

Multiply Line 11 by 21% (0.21) and enter the product.

Signature of Officer

Have the officer of the RIC or REIT that this form is being filed for sign the form in the space provided.

Date

Enter the date that the form was signed.

Title

Enter the title of the officer that signed this form.

Paid Preparer Use Only

Preparer’s Name

Enter the name of the preparer.

Preparer Signature

Have the preparer sign the form in the space provided.

Date

Enter the date that the preparer signed the form.

Self-employed

Check the box provided if the preparer is self-employed.

Preparer Tax Identification Number

Enter the preparer’s Preparer Tax Identification Number (PTIN).

Firm Name

Enter the name of the firm that the preparer works for, if applicable.

Firm EIN

Enter the firm’s EIN, if applicable.

Firm Address

Enter the firm’s number, street, city or town, county or state, country, and ZIP code, if applicable.

Phone Number

Enter the preparer’s primary phone number.

Tips when filling out Form 2438

While Form 2438 is very simple to fill out, it is important to make sure that all information entered is accurate and complete, so it may be beneficial to double-check the form after it has been accomplished.

Make sure all information entered is correct, and that the form is submitted to the appropriate place on time. This will help avoid any legal consequences for submitting the wrong information to the IRS and ensure that filing the form and claiming the credits goes smoothly.

Practice good contract management. Make sure to keep a copy of the form in a safe and organized area, or even copy it again in order to be doubly sure that you have a backup in case the original is damaged in some way. This will be useful for possible legal purposes in the future, or even simply as a record.