Form 1099-CAP 2013 Checklist
Filing Purpose and Reporting Requirements
Form 1099-CAP reports changes in corporate control or substantial capital structure changes affecting shareholders' stock exchanges for the 2012 calendar year. Filers must furnish Copy B to shareholders by January 31, 2014, and file Copy A with the IRS by February 28, 2014, or March 31, 2014, if filing electronically.
Expedited Deadline for Clearing Organizations
If the shareholder is a clearing organization, furnish Form 1099-CAP by January 6, 2014, per the expedited deadline. Clearing organizations receive this earlier deadline to allow sufficient time for processing and distribution to the underlying beneficial owners.
Reportable Events and Triggering Transactions
Verify the corporation experienced a reportable change in control or substantial capital structure change during the 2012 calendar year. Confirm the triggering event meets Section 368 reorganization or similar structural modification criteria per the 2012 Form 1099-CAP instructions.
The reportable event must involve an acquisition of control where the fair market value of stock acquired is $100 million or more, or a substantial capital structure change where the amount of cash or other property provided to shareholders is $100 million or more. The corporation must file if shareholders receive cash, stock, or other property as a result of the acquisition of control or a substantial change in capital structure.
Shareholder Identification and Taxpayer Information
Obtain the shareholder's complete taxpayer identification number, which may be a Social Security number, individual taxpayer identification number, or adoption taxpayer identification number. For 2013 furnishing requirements, the pilot program for truncating an individual's identifying number on paper payee statements has ended, and filers must show the shareholder's complete identifying number on all copies.
Stock Exchange Date and Transaction Details
Record the exact date of the stock exchange in Box 1 occurring during the 2012 calendar year. Ensure the date aligns with corporate action closing documentation and control transfer effective date as specified in the reorganization agreement.
Aggregate Amount Calculation Requirements
Calculate the aggregate amount received in Box 2 as the sum of all cash plus the fair market value of stock and other property transferred to the shareholder in exchange. Include all property classes in a single dollar amount representing the total consideration received by the shareholder.
The aggregate amount encompasses cash payments, the fair market value of any stock received, and the fair market value of any other property received in the corporate reorganization. This amount provides shareholders with the information needed to determine gain or loss on the exchange.
Share Count and Stock Classification
Enter the number of shares exchanged in Box 3, reflecting the total share count surrendered by the shareholder in the transaction. Do not adjust for fractional shares unless explicitly stated in the reorganization terms approved by the board of directors.
Stock Class Identification
Identify and list all classes of stock exchanged in Box 4, including preferred, common, or other equity classes involved in the transaction. Reference stock certificate or capitalization table documentation to ensure accurate classification, and abbreviate the class to fit the entry space, such as "C" for common stock, "P" for preferred, or "O" for other classes.
Corporation Identification and Contact Information
Complete the corporation identification section with the legal entity name, street address, city, state, ZIP code, telephone number, and federal employer identification number. Match the information to IRS records for Copy A filing to prevent processing delays or rejection.
Form 1096 Transmittal and Assembly
Prepare Form 1096, Annual Summary and Transmittal of U.S. Information Returns, for Copy A filing showing the aggregate number of Forms 1099-CAP being submitted. The Form 1096 is required for the February 28, 2014, paper filing deadline or the March 31, 2014, electronic filing deadline.
Assemble Copy A forms with Form 1096, ensuring all forms are properly organized and complete before submission to the IRS. Do not print Copy A from the IRS website for paper filing due to 2013 scanning restrictions that require machine-readable forms.
Copy Distribution and Printing Requirements
Print Copy B on white paper stock for distribution to shareholders by the January 31, 2014, deadline. Do not download Copy B from the IRS website if you are filing Copy A with the IRS, as the downloaded versions may not meet IRS specifications.
Shareholder Furnishing and Record Retention
Furnish Copy B to each shareholder who received cash, stock, or other property as a result of the acquisition of control or substantial change in capital structure and who is not an exempt recipient. Maintain Copy C for corporation records, retaining it for at least four years to support the information reported in case of IRS examination or shareholder inquiries.
Exempt Recipients and Filing Exceptions
The corporation is not required to file Form 1099-CAP for any shareholder who receives only stock for its stock in the corporation without any cash or other property. The corporation may also exclude any shareholder whose amount of cash plus the fair market value of any stock and other property does not exceed $1,000.
Additional exempt recipients include corporations (except S corporations), tax-exempt organizations, individual retirement accounts, the U.S. government or states, foreign governments, international organizations, foreign central banks, real estate investment trusts, regulated investment companies, securities or commodities dealers, entities registered under the Investment Company Act of 1940, common trust funds, and financial institutions. Any foreign person the corporation associates with a valid Form W-8BEN or other documentation upon which the corporation relies to treat the shareholder as a foreign beneficial owner or foreign payee is also exempt from Form 1099-CAP reporting.
Electronic Filing and Alternative Methods
File electronically if you choose the e-file option, meeting the March 31, 2014, due date for electronically filed returns. The February 28, 2014, deadline applies only to paper filings submitted by mail to the IRS. Electronic filing does not require a separate Form 1096 transmittal when submitted through approved electronic methods. Electronic filers must follow specifications and formatting requirements to ensure acceptance by the IRS system.
IRS Contact Information and Support
Contact the Information Reporting Customer Service toll-free number at 1-866-455-7438 or 304-263-8700 for 2013 reporting questions during regular business hours. TTY/TDD access is available via 304-579-4827 for individuals who are deaf, hard of hearing, or have speech disabilities.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
