What is Form 8937?
Form 8937, Report of Organizational Actions Affecting Basis of Securities, is an IRS form for an issuer of a specific security that has taken organizational actions that affected the basis of the security. According to the IRS, a specified security is defined as:
- A share of stock in a corporation or any entity treated as a corporation for federal tax purposes;
- An interest considered or treated as stock;
- An option, warrant, or stock right described in Regulations section 1.6045-1(m)(2), Returns of information of brokers and barter exchanges;
- A securities futures contract; or
- A debt instrument (aside from a debt instrument subject to section 1272(a)(6), Determination of daily portions where principal subject to acceleration, or a short-term obligation).
The IRS 8937 Form must be filed by both domestic and foreign issuers of securities if said securities are owned by US taxpayers directly or indirectly as a depositary receipt. This form must be filed when an organizational action takes place, and it affects the basis of security or holders of the security. However, you do not need to report a distribution on the 8937 IRS form if the distribution can be reported as a dividend on Form 1099-DIV, Dividends and Distributions.
There are instances where an issuer is exempted from filing Form 8937. Such exceptions include:
- Public reporting - The issuer posted a completed and signed Tax Form 8937 in a readily accessible format on its website and kept it accessible for ten years.
- Exempt recipients - The issuer determines that its holders are considered exempt recipients, including the United States, states, political subdivisions, C corporations, charitable corporations, IRAs, health savings accounts, Archer MSAs, and foreign holders.
- Money market funds - The issuer is a regulated investment company (RIC) that holds itself out as a money market fund under the Investment Company Act of 1940.
However, special rules apply if the issuer is an S Corporation or other RICs and Real Estate Investment Trusts (REITs). S Corporations that reported any effects of their organizational action affecting the basis on Schedule K-1 (Form 1120-S), Shareholder’s Share of Income, Deductions, Credits, etc., and timely provided a copy to all parties, then they are not required to file Form 8937.
Certain RICs and REITs are also not required to file the 8937 IRS form if they reported undistributed capital gains to shareholders on Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains.
You may download a PDF copy of the 8937 IRS form on its website. But you may electronically fill it out on PDFRun for your convenience.
How to fill out Form 8937?
The issuer must complete the required fields. Make sure to read the instructions carefully, and that all information you enter is true, accurate, and correct.
Part I - Reporting Issuer
Part I requires the personal information of the reporting issuer filling this form.
Item 1 - Issuer’s Name
Enter the issuer’s full legal name.
Item 2 - Issuer’s employer identification number
Enter the issuer’s employer identification number (EIN).
Item 3 - Name of contact for additional information
Enter the issuer’s name of the contact for additional information.
Item 4 - Telephone No. of contact
Enter the telephone number of the contact entered in Item 3.
Item 5 - Email address of contact
Enter the email address of the contact entered in Item 3.
Item 6 - Number and street (or PO box if mail is not delivered to street address) of contact
Enter the number and street address of the contact entered in Item 3. Enter also the PO box if the mail is not delivered to the street address.
Item 7 - City, town or post office, state, and ZIP code of contact
Enter the city, town or post office, state, and ZIP code of the contact entered in Item 3.
Item 8 - Date of action
Enter the date of the action of the security involved in the organizational action.
Item 9 - Classification and description
Enter the classification of the security and a description regarding the class of the affected security.
Item 10 - CUSIP number
Enter the Committee on Uniform Security Identification Procedures (CUSIP) number of the security.
Item 11 - Serial number(s)
Enter the serial number of the security.
Item 12 - Ticker symbol
Enter the ticker symbol of the security.
Item 13 - Account number(s)
Enter the account number of the security.
Part II - Organizational Action
Part II requires you to describe the organizational action of the issuer that affected the basis of the security. Attach any additional statements necessary for this portion.
Enter and describe the organizational action and the action or the date against which shareholders’ ownership is measured for the action, if applicable.
Enter and describe the quantitative effect of the organizational action on the basis of the security in the hands of a US taxpayer as an adjustment per share or as a percentage of the old basis.
Enter and describe the calculation of the change in basis and the data that supports the calculation. These include the market values of securities and valuation dates.
Enter and list all applicable Internal Revenue Code sections and subsections upon which the tax treatment is based.
Enter if any resulting loss can be recognized.
Enter and provide any other information necessary to implement the adjustment, like the reportable tax year.
This portion confirms that you are declaring that you examined the return along with the accompanying schedules and statement, and you declare that they are true, correct, and complete. Otherwise, you will be penalized for perjury.
This portion also provides that the declaration of preparer, other than an officer, is also based on all information of which the prepare has any knowledge.
Affix your signature.
Enter the date you signed the form.
Print your name
Enter your full legal name.
Enter your title.
How to file Form 8937?
Tax form 8937 must be filed with the IRS on or before 45 days following the date of the organizational action. If you are filing earlier, you may do so on or before January 15 of the year following the calendar year of the organizational action.
You may also file the 8937 Form before the organizational action if the quantitative effect on a basis can be determined. To determine the deadline, redemption occurs on the last day a holder may redeem his security.
Submit your completed IRS Form 8937 to the Department of Treasury of the Internal Revenue Service at Ogden, Utah.