Instructions For Form 1099-Cap - 2018

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2018
Department of the Treasury
Internal Revenue Service
Instructions for Form
1099-CAP
Changes in Corporate Control and Capital Structure
Section references are to the Internal Revenue Code
information has engaged in a transaction of acquisition of
unless otherwise noted.
control or substantial change in capital structure must file
Form 1099-B unless the customer is an exempt recipient.
Future Developments
Readily available information includes information from a
clearing organization, such as the Depository Trust
For the latest information about developments related to
Company (DTC). Information is also published on the IRS
Form 1099-CAP and its instructions, such as legislation
website. Go to IRS.gov and enter keyword “Form 8806” in
enacted after they were published, go to
IRS.gov/
the upper right corner.
Form1099CAP.
Reminder
A domestic corporation that is required to file Form 8806,
Information Return for Acquisition of Control or Substantial
In addition to these specific instructions, you should also
Change in Capital Structure, must file Form 1099-CAP
use the 2018 General Instructions for Certain Information
with the IRS and furnish a copy to each shareholder who
Returns. Those general instructions include information
receives cash, stock, or other property as a result of the
about the following topics.
acquisition of control or substantial change in capital
Who must file (nominee/middleman).
structure and who is not an exempt recipient. However, if
When and where to file.
the corporation can reasonably determine that the receipt
Electronic reporting requirements.
of such stock would not cause the shareholder to
Corrected and void returns.
recognize gain, then the corporation is not required to
Statements to recipients.
report the fair market value (FMV) of any stock provided to
Taxpayer identification numbers (TINs).
a shareholder. Corporations do not file Form 1099-CAP
Backup withholding.
under one of the following conditions.
Penalties.
The transaction involves the acquisition of control within
Other general topics.
an affiliated group or involves stock valued at less than
$100 million.
You can get the general instructions at
General
Instructions for Certain Information Returns
or go to
The corporation makes the consent election on Form
8806. Under the election, the corporation is not required
IRS.gov/Form1099CAP.
to file Form 1099-CAP with respect to shares held by a
Specific Instructions
clearing organization because it allows the IRS to publish
information necessary for brokers to meet their reporting
File Form 1099-CAP, Changes in Corporate Control and
obligations.
Capital Structure, for shareholders of a corporation if
The corporation properly reports the transaction under
control of the corporation was acquired or it underwent a
section 6043(a).
substantial change in capital structure. Form 1099-CAP is
Information returns are filed under section 6042 (Form
furnished to shareholders who receive cash, stock, or
1099-DIV) or section 6045 (Form 1099-B), unless the
other property from an acquisition of control or a
corporation knows or has reason to know that such
substantial change in capital structure.
returns were not filed.
Online Fillable Form
Exempt Recipients
Due to the very low volume of paper Forms 1099-CAP
The corporation is not required to file Form 1099-CAP for
received and processed by the IRS each year, this form
the following shareholders including brokers who are also
has been converted to an online fillable format. You may
exempt.
fill out the form, found online at IRS.gov/Form1099CAP,
Any shareholder who receives only stock for its stock in
and send Copy B to the recipient. For filing with the IRS,
the corporation.
follow your usual procedures for filing electronically if you
Any shareholder whose amount of cash plus the FMV
are filing 250 or more forms. If you are filing this form on
of any stock and other property does not exceed $1,000.
paper due to a low volume of recipients, for this form
Any shareholder from whom the corporation has
only, you may send in the black-and-white Copy A with a
received a properly completed exemption certificate.
Form 1096 that you print from the IRS website.
Any one of the following.
Who Must File
1. A corporation, except a subchapter S corporation.
Any broker who holds shares on behalf of a
2. A tax-exempt organization.
customer in a corporation that the broker knows or
3. An individual retirement account (IRA).
TIP
has reason to know based on readily available
Sep 28, 2017
Cat. No. 35150T

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