Instructions for Form 

1099-CAP

(Rev. September 2019)

Changes in Corporate Control and Capital Structure

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code 

unless otherwise noted.

Future Developments

For the latest information about developments related to 

Form 1099-CAP and its instructions, such as legislation 

enacted after they were published, go to IRS.gov/

Form1099CAP.

Reminders

In addition to these specific instructions, you should also 

use the current General Instructions for Certain 

Information Returns. Those general instructions include 

information about the following topics.

• Who must file.

• When and where to file.

• Electronic reporting.

• Corrected and void returns.

• Statements to recipients.

• Taxpayer identification numbers (TINs).

• Backup withholding.

• Penalties.

• Other general topics.

You can get the general instructions at General 

Instructions for Certain Information Returns or go to 

IRS.gov/Form1099CAP.

Continuous-use form and instructions. Form 

1099-CAP and its instructions have been converted from 

an annual revision to continuous use. Both the form and 

instructions will be updated as needed. For the most 

recent version, go to IRS.gov/Form1099CAP.

Online fillable form. Due to the very low volume of 

paper Forms 1099-CAP received and processed by the 

IRS each year, this form has been converted to an online 

fillable format. You may fill out the form, found online at 

IRS.gov/Form1099CAP, and send Copy B to the recipient. 

For filing with the IRS, follow the applicable procedures if 

you are required to file electronically. If you are filing this 

form on paper due to a low volume of recipients, for this 

form only, you may send in the black-and-white Copy A 

with a Form 1096 that you print from the IRS website.

Specific Instructions

File Form 1099-CAP, Changes in Corporate Control and 

Capital Structure, for shareholders of a corporation if 

control of the corporation was acquired or it underwent a 

substantial change in capital structure. Form 1099-CAP is 

furnished to shareholders who receive cash, stock, or 

other property from an acquisition of control or a 

substantial change in capital structure.

Who Must File

Any broker who holds shares on behalf of a 

customer in a corporation that the broker knows or 

has reason to know based on readily available 

information has engaged in a transaction of acquisition of 

control or substantial change in capital structure must file 

Form 1099-B unless the customer is an exempt recipient. 

Readily available information includes information from a 

clearing organization, such as the Depository Trust 

Company (DTC). Information is also published on the IRS 

website. Go to IRS.gov and enter keyword “Form 8806” in 

the upper right corner.

A domestic corporation that is required to file Form 8806, 

Information Return for Acquisition of Control or Substantial 

Change in Capital Structure, must file Form 1099-CAP 

with the IRS and furnish a copy to each shareholder who 

receives 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. However, if 

the corporation can reasonably determine that the receipt 

of such stock would not cause the shareholder to 

recognize gain, then the corporation is not required to 

report the fair market value (FMV) of any stock provided to 

a shareholder. Corporations do not file Form 1099-CAP 

under one of the following conditions.

• The transaction involves the acquisition of control within 

an affiliated group or involves stock valued at less than 

$100 million.

• The corporation makes the consent election on Form 

8806. Under the election, the corporation is not required 

to file Form 1099-CAP with respect to shares held by a 

clearing organization because it allows the IRS to publish 

information necessary for brokers to meet their reporting 

obligations.

• The corporation properly reports the transaction under 

section 6043(a) on Form 966, Corporate Dissolution or 

Liquidation.

• Information returns are filed under section 6042 (Form 

1099-DIV) or section 6045 (Form 1099-B), unless the 

corporation knows or has reason to know that such 

returns were not filed.

Exempt Recipients

The corporation is not required to file Form 1099-CAP for 

the following shareholders including brokers who are also 

exempt.

• Any shareholder who receives stock in an exchange 

that is not subject to gain recognition under section 367(a) 

and the regulations.

• Any shareholder whose amount of cash plus the FMV 

of any stock and other property does not exceed $1,000.

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• Any shareholder from whom the corporation has 

received a properly completed exemption certificate.

• Any one of the following.

1. A corporation, except a subchapter S corporation.

2. A tax-exempt organization.

3. An individual retirement account (IRA).

4. The U.S. Government or a state.

5. A foreign government, an international organization, 

or a foreign central bank of issue.

6. A real estate investment trust (REIT).

7. A regulated investment company (RIC).

8. A securities or commodities dealer.

9. An entity registered under the Investment Company 

Act of 1940.

10. A common trust fund.

11. A financial institution such as a bank, savings and 

loan, credit union, or similar organization.

• Any foreign person the corporation associates with a 

valid Form W-8BEN, Certificate of Foreign Status of 

Beneficial Owner for United States Tax Withholding, or 

other documentation upon which the corporation relies in 

order to treat the shareholder as a foreign beneficial 

owner or foreign payee. See Regulations section 

1.6049-5(c) for more information.

Corporations are not relieved of their withholding 

obligations on nonresident aliens under section 

1441.

Acquisition of Control

An acquisition of control of a corporation (first corporation) 

occurs if, in a transaction or series of related transactions, 

before an acquisition of stock of the first corporation 

(directly or indirectly) by a second corporation, the second 

corporation does not have control of the first corporation; 

after the acquisition, the second corporation has control of 

the first corporation; the FMV of the stock acquired in the 

transaction and in any related transactions as of the date 

or dates on which the stock was acquired is $100 million 

or more; the shareholders of the first corporation receive 

stock or other property pursuant to the acquisition; and 

the first corporation or any of its shareholders is required 

to recognize gain under section 367(a) as a result of the 

transaction.

For these purposes, control is defined as the ownership 

of stock possessing at least 50% of the total combined 

voting power of all classes of stock entitled to vote, or at 

least 50% of the total value of shares of all classes of 

stock.

See Form 8806 and Regulations section 1.6043-4 for 

details and special rules with respect to constructive 

ownership of stock.

Section 338 election. An acquisition of stock of a 

corporation under which a section 338 election is made is 

treated as an acquisition of stock and not as an 

acquisition of the assets of the corporation.

CAUTION

!

Substantial Change in Capital Structure

A change in capital structure occurs if:

• The amount of cash or other property provided to its 

shareholders is $100 million or more and the corporation 

in a transaction or series of transactions merges, 

consolidates, or otherwise combines with another 

corporation or transfers all or substantially all of its assets 

to one or more corporations;

• Transfers all or part of its assets to another corporation 

under bankruptcy proceedings including distributing its 

stock or securities; or

• Changes its identity, form, or place of organization; and

• The corporation or any of its shareholders is required to 

recognize gain under section 367(a) as a result of the 

transaction.

When To File

See part C in the current General Instructions for Certain 

Information Returns and its Guide to Information Returns 

for filing and furnishing dates. But see the separate 

guidance for clearing organizations in Special reporting 

date–clearing organizations next.

Special reporting date–clearing organizations. A 

corporation must file Form 1099-CAP and furnish a copy 

to each of its shareholders who receives any stock or 

other consideration in the transaction and who is not an 

exempt recipient. A clearing organization, such as the 

DTC, is not an exempt recipient. The corporation is 

therefore required to file and furnish a copy of Form 

1099-CAP to a clearing organization with respect to 

shares held by the clearing organization unless it makes a 

consent election, as discussed below. Furnish Form 

1099-CAP to the clearing organization by the due date 

shown in the current General Instructions for Certain 

Information Returns. If you are furnishing the DTC with 

Forms 1099-CAP, see Notice 2004-9, 2004-04 I.R.B. 334, 

available at IRS.gov/irb/2004-04_IRB#NOT-2004-9.

Penalties for Failure To File

The penalties under section 6652(l) for failure to file 

information returns under section 6043(c) apply. For 

purposes of the section 6652(l) penalty, Form 8806 and 

all Forms 1099-CAP required to be filed are treated as 

one return. Thus, the penalty will not exceed $500 for 

each day the failure continues, up to a maximum of 

$100,000, for any acquisition of control or any substantial 

change in capital structure. If a corporation (transferor) 

transfers all or substantially all of its assets to another 

entity (transferee) and is required to file Form 1099-CAP, 

the transferor must satisfy the reporting requirements. If 

the transferor fails to file Form 1099-CAP, then the 

transferee must meet the filing requirements. If the filing 

requirements are not met by either the transferor or 

transferee, then both are jointly and severally liable for the 

applicable penalties.

Failure to file Forms 1099-CAP also includes the 

requirement to file electronically. For more information on 

penalties for failure to file electronically, see part F in the 

current General Instructions for Certain Information 

Returns.

-2- Instructions for Form 1099-CAP (Rev. 9-2019)
Statement to Shareholder

If required to file Form 1099-CAP, you must furnish a 

statement to the shareholder. For more information about 

the requirement to furnish a statement to the shareholder, 

see part M in the current General Instructions for Certain 

Information Returns.

Truncating recipient’s TIN. Under Regulations section 

301.6109-4, corporations required to file Form 1099-CAP 

may truncate a recipient’s TIN (social security number 

(SSN), individual taxpayer identification number (ITIN), 

adoption taxpayer identification number (ATIN), or 

employer identification number (EIN)) on payee 

statements. A filer's TIN may not be truncated on any 

form. Truncation is not allowed on any documents the filer 

files with the IRS. See part J in the current General 

Instructions for Certain Information Returns.

Account Number

The account number is required if you have multiple 

accounts for a recipient for whom you are filing more than 

one Form 1099-CAP. Additionally, the IRS encourages 

you to designate an account number for all Forms 

1099-CAP that you file. See part L in the current General 

Instructions for Certain Information Returns.

Corporation’s Name, Address, Telephone 

Number, and Federal Identification Number

Generally, this will be the reporting corporation's 

information and EIN.

Box 1. Date of Sale or Exchange

Enter the trade date of the sale or exchange, actually or 

constructively received.

Box 2. Aggregate Amount Received

Enter the aggregate amount of cash and the FMV of any 

stock and other property received in exchange for the 

number of shares exchanged in the reporting corporation.

Box 3. No. of Shares Exchanged

Enter the number of shares the shareholder exchanged in 

the reporting corporation for cash or other property 

received.

Box 4. Classes of Stock Exchanged

Enter the class or classes of stock (for example, 

preferred, common, etc.) exchanged in the reporting 

corporation for cash or other property received. 

Abbreviate the class to fit the entry. For example, you may 

enter “C” for common stock, “P” for preferred, or “O” for 

other. Also, abbreviate any subclasses.

Instructions for Form 1099-CAP (Rev. 9-2019) -3-