Form 2438 Undistributed Capital Gains Tax Return OMB No.

1545-0144

Department of the Treasury

Internal Revenue Service
© Attach a copy of this form to Form 1120-RIC or to Form 1120-REIT. 1997
For calendar year 1997 or tax year beginning , 1997, ending , 19
Name of fund/REIT Employer identification number

Please
Type Number, street, and room or suite no. (If a P.O. box, see instructions.)
or
Print City or town, state, and ZIP code

Part I Short-Term Capital Gains and Losses—Assets Held One Year or Less
(a) Kind of property and description (Example, (b) Date acquired (c) Date sold (e) Cost or other
(d) Sales price (f) Gain or (loss)
basis (see
100 shares of Z Company) (mo., day, yr.) (mo., day, yr.) (see instructions) ((d) less (e))
instructions)
1

2 Short-term capital gain from installment sales from Form 6252, line 26 or 37 2
3 Unused capital loss carryover (attach computation) 3 ( )

4 Net short-term capital gain or (loss). Combine lines 1 through 3. (See instructions.) 4
Part II Long-Term Capital Gains and Losses—Assets Held More Than One Year
5

6 Gain from Form 4797, column (g), line 7 or 9 6

7 Long-term capital gain from installment sales from Form 6252, line 26 or 37 7

8 Net long-term capital gain. Combine lines 5 through 7 8

Part III Summary of Parts I and II
9a Net capital gain. Enter excess of net long-term capital gain (line 8) over net short-term capital loss
(line 4) 9a
b Capital gain dividends 9b
10 Undistributed capital gains. Subtract line 9b from line 9a 10
11 Amount of undistributed capital gains on line 10 designated under section 852(b)(3)(D) or section
857(b)(3)(D) 11
12 Amount of undistributed capital gains not designated under section 852(b)(3)(D) or section
857(b)(3)(D). Subtract line 11 from line 10. (See instructions.) 12

13 Capital gains tax. Multiply line 11 by 35% (.35). (See instructions.) 13

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge
Please and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
Sign
Here © Signature of officer Date © Title

©
Date Preparer’s social security number
Paid Preparer’s Check if self-
signature employed ©
Preparer’s
Use Only
Firm’s name (or
yours if self-employed)
and address
© EIN ©

ZIP code ©

For Paperwork Reduction Act Notice, see instructions on back. Cat. No. 11856I Form 2438 (1997)
Form 2438 (1997) Page 2

General Instructions ● Sign the return, by hand, in the space Specific Instructions
provided for the preparer’s signature (signature
Section references are to the Internal Revenue stamps and labels are not acceptable). Period covered. File the 1997 return for
Code unless otherwise noted. calendar year 1997 and fiscal years that begin in
● Furnish a copy of Form 2438 to the taxpayer.
1997 and end in 1998. For a fiscal year, fill in the
Changes To Note tax year space at the top of the form.
Penalty for Late Filing of Return
Address. Include the suite, room, or other unit
● For tax years beginning after August 5, 1997, A fund or REIT that does not file its tax return by number after the street address. If the Post
the Taxpayer Relief Act of 1997 provides that a the due date, including extensions, may be Office does not deliver mail to the street address
real estate investment trust (REIT) may now elect penalized 5% of the unpaid tax for each month and the fund or REIT has a P.O. box, show the
under section 857(b)(3)(D) to retain and pay tax or part of a month the return is late, up to a box number instead of the street address.
on the net long-term capital gains it received maximum of 25% of the unpaid tax. The
during the tax year, just as a regulated minimum penalty for a return that is more than Lines 1 and 5
investment company (RIC) is currently permitted 60 days late is the smaller of the tax due or
to do. Column (d). Enter either gross sales price or net
$100. The penalty will not be imposed if the fund sales price. If net sales price is entered, do not
● The penalty for failure to make electronic or REIT can show that the failure to file on time increase the cost or other basis in column (e) by
deposits of depository taxes using the Electronic was due to reasonable cause. Funds or REITs any expenses reflected in the net sales price.
Federal Tax Payment System (EFTPS) has been that file late must attach a statement explaining
the reasonable cause. Column (e). If gross sales price is reported in
temporarily waived for filers who were required
column (d), increase the cost or other basis by
to first use EFTPS on or after July 1, 1997. For
any expense of sale such as broker’s fees,
more information, see Electronic deposit Penalty for Late Payment of Tax commissions, or option premiums before
requirement below.
A fund or REIT that does not pay the tax when entering an amount in column (e).
due may be penalized 1⁄2 of 1% of the unpaid tax
Who Must File for each month or part of a month the tax is not Line 4
RICs file Form 2438 if the fund is electing to paid, up to a maximum of 25% of the unpaid If the fund or REIT has any net short-term capital
designate undistributed capital gains under tax. The penalty will not be imposed if the fund gain on line 4, enter it on line 1 of Schedule D
section 852(b)(3)(D). For tax years beginning after or REIT can show that the failure to pay on time (Form 1120) as “Net short-term capital gain from
August 5, 1997, REITs also file the form to make was due to reasonable cause. line 4, Form 2438.” For information on a
the undistributed capital gains designation under short-term capital loss, see the Schedule D
section 857(b)(3)(D). Depository Method of Tax (Form 1120) instructions.
If a RIC has more than one fund, each fund Payment
must file a separate Form 2438. The term “fund”
Line 12
as used in these instructions refers to the Some funds or REITs are required to Enter the amount from line 12 on line 6 of
definition in section 851(h) and to any RIC that electronically deposit all depository taxes, Schedule D (Form 1120). Report this amount as
does not have more than one portfolio of assets. including corporation income tax payments. “Undistributed capital gains not designated from
Electronic deposit requirement. The fund or Form 2438.”
Purpose of Form REIT must make electronic deposits of all
depository tax liabilities that occur after 1997 if: Line 13
Form 2438 is used by RICs to figure income tax
on undistributed capital gains designated under ● It was required to electronically deposit taxes Deposit the tax due by the 30th day after the
section 852(b)(3)(D) or by REITs under section in prior years, end of the tax year.
857(b)(3)(D). ● It deposited more than $50,000 in social
See the instructions for Schedule D (Form security, Medicare, and withheld income taxes in
1120) for a definition of capital assets and 1996, or Paperwork Reduction Act Notice. We ask for
information on figuring and reporting capital ● It did not deposit social security, Medicare, or the information on this form to carry out the
gains and losses. withheld income taxes in 1995 or 1996, but Internal Revenue laws of the United States. You
deposited more than $50,000 in other taxes are required to give us the information. We need
When and Where To File under section 6302 (such as the corporate it to ensure that you are complying with these
income tax) in either year. (See Regulations laws and to allow us to figure and collect the
File Form 2438 by the 30th day after the end of section 31.6302-1(h) for more information.) right amount of tax.
the fund’s or the REIT’s tax year. You are not required to provide the
EFTPS must be used to make electronic
File the form with the same Internal Revenue deposits. If the fund or REIT is required to make information requested on a form that is subject
Service Center where the fund will file its Form electronic deposits and fails to do so, it may be to the Paperwork Reduction Act unless the form
1120-RIC or the REIT will file its Form subject to a 10% penalty. However, no penalty displays a valid OMB control number. Books or
1120-REIT. Attach a copy of Form 2438 to the will be imposed prior to July 1, 1998, if the fund records relating to a form or its instructions must
fund’s Form 1120-RIC or the REIT’s Form or REIT was first required to use EFTPS on or be retained as long as their contents may
1120-REIT. after July 1, 1997. Funds or REITs that are not become material in the administration of any
required to make electronic deposits may Internal Revenue law. Generally, tax returns and
return information are confidential, as required
Who Must Sign voluntarily participate in EFTPS. To enroll in
by section 6103.
EFTPS, call 1-800-945-8400 or 1-800-555-4477.
Form 2438 must be signed and dated by one of For general information about EFTPS, call The time needed to complete and file this form
the following individuals: 1-800-829-1040. will vary depending on individual circumstances.
● The president, vice president, treasurer, Deposits with Form 8109. If the fund or REIT The estimated average time is:
assistant treasurer, chief accounting officer, or does not use EFTPS, deposit income tax Recordkeeping 7 hr., 39 min.
● Any other corporate officer (such as tax payments with Form 8109. See the instructions Learning about the
officer) authorized to sign. Receivers, trustees, or for Form 1120-RIC or 1120-REIT for information law or the form 35 min.
assignees must also sign and date any return on making deposits with Form 8109.
Preparing and sending
filed on behalf of a fund or REIT. A penalty may be imposed if the deposits are the form to the IRS 45 min.
Note: If this return is being filed for a series fund mailed or delivered to an IRS office rather than
If you have comments concerning the
(discussed in section 851(h)), the return may be to an authorized depositary or FRB. For more
accuracy of these time estimates or suggestions
signed by any officer authorized to sign for the information on deposits, see the instructions in
for making this form simpler, we would be happy
RIC in which the fund is a series. the coupon booklet (Form 8109) and Pub. 583.
to hear from you. You can write to the Tax
If a corporate officer completes Form 2438, Caution: If the fund or REIT owes tax when it Forms Committee, Western Area Distribution
the Paid Preparer’s space should remain blank. files Form 2438, do not include the payment with Center, Rancho Cordova, CA 95743-0001. DO
Anyone who prepares Form 2438 but does not the tax return. Instead, mail or deliver the NOT send the tax form to this office. Instead,
charge the fund or REIT should not sign the payment with Form 8109 to a qualified see When and Where To File above.
return. Generally, anyone who is paid to prepare depositary or FRB, or use the EFTPS, if
Form 2438 must sign it and fill in the Paid applicable.
Preparer’s Use Only area.
Paid preparer. The paid preparer must complete
the required preparer information and: