Organizations that issue specified securities must file Form 8937 with the IRS if an organizational action affects the basis of a security or class of the security. Examples include cash distributions to shareholders and stock splits, with some exceptions like initial public offerings and debt instruments. The filing deadline is 45 days following the action or, if earlier, January 15 of the following year.
What is Form 8937?
Form 8937 is a filing requirement for domestic and foreign organizations that hold securities that are owned by U.S. taxpayers. It must be filed when an organizational action affects the basis of holders of a security or holders of a certain class of the security. Examples include nontaxable cash and stock distributions, such as stock splits, and conversion rate adjustments on convertible debt instruments. The deadline for filing the form is 45 days after the organizational action, or January 15 of the following year if the action was in the same calendar year. There are specific exceptions for filing Form 8937, such as public reporting, exempt recipients, and certain money market funds. In addition, special rules apply to S corporations and RICs and REITs.
IRS Form 8937 – Who Needs to Fill It Out?
Form 8937 should be filled out and filed by issuers of a specified security that have undertaken an organizational action affecting the basis of the security. A specified security includes, but is not limited to, stock in a corporation, American Depositary Receipts, options, warrants, stock rights, securities futures contracts, and debt instruments. Organizations must also file Form 8937 for nontaxable cash/stock distributions, stock splits, and conversion rate adjustments. Public reporting, exempt recipients, and certain money market funds are exceptions to this filing requirement. S corporations, certain RICs & REITs may also satisfy the reporting requirements for some organizational actions. Form 8937 must be filed with the IRS on or before the 45th day after the organizational action, or January 15 of the following year.
Step-by-Step: Form 8937 Instructions For Filling Out the Document
To fill out Form 8937, organizations must generally be issuers of specified securities, such as stocks, options, warrants, securities futures contracts, or debt instruments, and must be taking an organizational action that affects the basis of those securities. Form 8937 must be filed within 45 days of the organizational action or, if earlier, January 15 of the year following the calendar year of the organizational action. An exception to filing may occur if the organizational action is reportable as a dividend on Form 1099-DIV, or if the issuer posts a signed Form 8937 to a public website, or if they determine all holders of the security are exempt recipients, including C-corporations, charitable organizations, foreign holders, and IRAs. In addition, S-corporations that report the effect of organizational actions on Schedule K-1 and RICs/REITs that report undistributed capital gains on Form 2439 may satisfy the filing requirement.
Below, we present a table that will help you understand how to fill out Form 8937.
|Instructions for Form 8937||Details|
|Eligibility||Generally for issuers of specified securities affecting basis|
|Filing deadline||Within 45 days of organizational action or by January 15 of the following year|
|Exceptions||May not need to file under certain conditions|
|Additional requirements||S-corporations, RICs/REITs, and reporting|
|Filing extensions||Request an extension using Form 7004 if needed|
Do You Need to File Form 8937 Each Year?
Yes, if you are an issuer of a specified security that takes an organizational action that affects the basis of that security, you must file Form 8937. This includes actions such as a nontaxable cash or stock distribution, a stock split, or a change in a convertible debt instrument’s conversion rate. However, you do not need to file Form 8937 for an initial public offering or other distribution that is reportable on Form 1099-DIV. Special rules apply for S corporations, certain RICs and REITs, and money market funds. Form 8937 must be filed within 45 days of the organizational action, or no later than January 15 of the following year.
Download the official IRS Form 8937 PDF
On the official IRS website, you will find a link to download Form 8937. However, to make it easier for you, we are providing the link in our article, which comes directly from the official irs.gov website! Click to download: Form 8937