Changes in Corporate Control and Capital Structure
Form 1099-CAP is used for changes in capital structure. However, this is not for all changes in capital structure. Form 1099-CAP is only filed if the change is significant. This includes situations where
- The corporation transfers its assets to another corporation during bankruptcy proceedings.
- The corporation changes the place of organization, identity, form, and tax classification in some cases.
- The corporation is required to recognize Internal Revenue Code 367(a) as a result of the transaction
- The corporation gives at least $100 million to shareholders and the corporation transfers assets to or combines with another corporation.
Since the use of Form 1099-CAP is very limited. So is the information that can be provided there. On Form 1099-CAP, the filer can provide information about the date of exchange or sale, the aggregate amount received, the number of shares exchanged, and classes of stock exchanged. Box 5 of Form 1099-CAP is blank. This is for providing extra information for other than the boxes that have a designated field.
Where to file Form 1099-CAP?
Form 1099-CAP can be filed on paper or via IRS Free File. Although it is commonly filed on paper, it can be filed electronically by a single person as long as all the shareholders are okay with it.
You can get Form 1099-CAP from here. This is the paper version where you can enter the information necessary and print out as it is. Do not mistake this with e-filing though. Filing tax forms electronically is entirely something different. If you’re in need of guidance on how to file it using the IRS Free File, read this article instead.
Although the IRS allows taxpayers to file certain tax forms electronically through Free File, you may want to read the instructions first. The information required on 1099-CAP is limited but very complicated in its own terms. Having said that, make sure to take a look at the instructions before filing.