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Publication 17

Capital Gain Distributions(p64)

Capital gain distributions (also called capital gain dividends) are paid to you or credited to your account by mutual funds (or other regulated investment companies) and real estate investment trusts (REITs). They will be shown in box 2a of the Form 1099-DIV you receive from the mutual fund or REIT.
Report capital gain distributions as long-term capital gains, regardless of how long you owned your shares in the mutual fund or REIT.

Qualified Opportunity Fund. (p64)

Effective December 22, 2017, IRC 1400Z-2 provides a temporary deferral of inclusion in gross income for capital gains invested in Qualified Opportunity Funds, and permanent exclusion of capital gains from the sale or exchange of an investment in the Qualified Opportunity Fund if the investment is held for at least 10 years. See Form 8949 instructions on how to report your election to defer eligible gains invested in a Qualified Opportunity Fund. For additional information, please see Opportunity Zones Frequently Asked Questions available at

Undistributed capital gains of mutual funds and REITs. (p64)

Some mutual funds and REITs keep their long-term capital gains and pay tax on them. You must treat your share of these gains as distributions, even though you didn't actually receive them. However, they aren't included on Form 1099-DIV. Instead, they are reported to you in box 1a of Form 2439.
Report undistributed capital gains (box 1a of Form 2439) as long-term capital gains on Schedule D (Form 1040), line 11, column (h).
The tax paid on these gains by the mutual fund or REIT is shown in box 2 of Form 2439. You take credit for this tax by including it on Schedule 5 (Form 1040), line 74a, and following the instructions there.
Basis adjustment. (p64)
Increase your basis in your mutual fund, or your interest in a REIT, by the difference between the gain you report and the credit you claim for the tax paid.

Additional information. (p64)

For more information on the treatment of distributions from mutual funds, see Pub. 550.