Form 1099-CAP (2018) Checklist
2018 Purpose Statement
Form 1099-CAP reports changes in corporate control or substantial capital structure modifications. For 2018, the form reflects post-Tax Cuts and Jobs Act rules affecting gain recognition and reporting on Form 8949.
Shareholder loss-limitation language remains unchanged since 2016 but applies under revised capital gains treatment frameworks. Corporations use this form to report transactions where shareholders receive cash, stock, or other property as a result of the acquisition of control or a substantial change in capital structure.
Preparation Steps
Verify Reportable Corporate Transaction
Corporations must verify they underwent a reportable change in control or substantial capital structure change during the 2018 calendar year per IRC Section 368 or Section 304 requirements. Corporations must document the exact date of exchange in Box 1.
Obtain Shareholder Identification Data
Filers must obtain shareholder identification data, including SSN, EIN, or ITIN. Report complete identification numbers to the IRS while displaying only the last four digits on Copy B per 2018 information return privacy standards.
Calculate Aggregate Fair Market Value
Enter the aggregate fair market value of all cash, stock, and other property received by the shareholder in Box 2. Communicate that shareholders cannot claim a loss based on this amount under the 2018 instructions.
Count and Record Share Exchange Information
Record the total number of shares exchanged in Box 3. Identify all classes of stock surrendered in Box 4 to ensure accurate gain-recognition computation under post-TCJA corporate reorganization rules.
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.
Complete Additional Information Fields
Box 5 must be completed if additional information is necessary. Reference Publication 550, Chapter 4 (as updated for 2018) for treatment of boot received and nonrecognition property under IRC Section 368 rules.
Prepare Required Copies
Prepare Copy A for IRS submission, Copy B for shareholder distribution, and Copy C for corporation retention using identical data across all copies. Mark the VOID or CORRECTED box only when reissuing a previously filed 2018 return to correct errors or void prior submissions.
File Copy A with IRS
File Copy A with Form 1096 by February 28, 2019, if submitting paper returns to the IRS. Electronic filers must submit by April 1, 2019, using software that generates files according to Publication 1220 specifications.
Furnish Copy B to Shareholders
Furnish Copy B to each shareholder by January 31, 2019. If the shareholder is a clearing organization, provide Copy B by January 7, 2019, per the 2018 due-date rules for information returns.
2018-Specific IRS Updates
Post-TCJA Reporting Requirements
Form 1099-CAP guidance references Section 368 reorganizations under the 2018 corporate tax rate of 21 percent and modified Section 1231 gain-loss netting. Publication 550 Chapter 4 (2018 edition) applies to capital structure analysis.
Shareholder Reporting on Form 8949
Instructions for 2018 emphasize that recognized gain from Box 2 receipt must be reported on Form 8949 Sales of Capital Assets, not Form 4797. Loss disallowance remains absolute regardless of transaction type.
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.
Electronic Filing Threshold
Corporations filing 250 or more information returns must file electronically using software that meets Publication 1220 specifications. Paper filing is permitted only for corporations submitting fewer than 250 returns during the calendar year.
Clearing Organization Due Date
Clearing organizations must receive Copy B by the advance deadline of January 7, 2019, for 2018 calendar year transactions. All other shareholders must receive Copy B by the standard deadline of January 31, 2019.
Unrelated Reporting Requirements
Form 1099-CAP does not require reporting for EIP, ACA shared responsibility, or unemployment exclusion in 2018. The form layout and filing requirements remain unchanged from the 2016 version without modifications to the box structure or reporting procedures.
Exempt Recipients
Filers are not required to file Form 1099-CAP for the following shareholders:
- Any shareholder who receives only stock for its stock in the corporation
- Any shareholder whose amount of cash plus the FMV of any stock and other property does not exceed $1,000
- Any shareholder from whom the corporation has received a properly completed exemption certificate
- Corporations (except subchapter S corporations)
- Tax-exempt organizations
- Individual retirement accounts
- The U.S. Government or any state
- Foreign governments, international organizations, or foreign central banks of issue
- Real estate investment trusts
- Regulated investment companies
- Securities or commodities dealers
- Entities registered under the Investment Company Act of 1940
- Common trust funds
- Financial institutions such as banks, savings and loans, credit unions, or similar organizations
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.
Acquisition of Control Definition
An acquisition of control occurs when the second corporation gains control after not having control before the stock acquisition. The FMV of the stock acquired must be $100 million or more, shareholders must receive stock or other property pursuant to the acquisition, and the first corporation or any of its shareholders must be required to recognize gain under section 367(a) as a result of the transaction.
Control is defined as the ownership of stock possessing at least 50 percent of the total combined voting power of all classes of stock entitled to vote. Control also means at least 50 percent of the total value of shares of all classes of stock.
Substantial Change In Capital Structure
A change in capital structure occurs when reporting entities provide $100 million or more in cash or other property to shareholders through mergers, consolidations, asset transfers, bankruptcy proceedings, or changes in corporate identity, form, or place of organization. Either the corporation or any of its shareholders must be required to recognize gain under section 367(a) as a result of the transaction.
Need Help With Your Tax Filing?
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
We offer:
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Call now before filing: (888) 260-9441
Fast transcript pull available
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.
