Regulated Investment Company OMB No. 1545-0144

Undistributed Capital Gains Tax Return Form 2438

File only if the fund elects to designate undistributed capital gains under section 852(b)(3)(D). Department of the Treasury

Internal Revenue Service © Attach a copy of this form to Form 1120-RIC.

For calendar year 1996 or tax year beginning , 1996, ending , 19

Name of fund Employer identification number

Please

Type

or

Print

Number, street, and room or suite no. (If a P.O. box, see instructions.)

City or town, state, and ZIP code

Short-Term Capital Gains and Losses—Assets Held One Year or Less

(f) Gain or (loss)

((d) less (e))

(e) Cost or other

basis (see

instructions)

(c) Date sold

(mo., day, yr.)

(b) Date acquired

(mo., day, yr.)

(a) Kind of property and description (Example,

100 shares of Z Company)

1

2 Short-term capital gain from installment sales from Form 6252, line 26 or 37 2

3 ( ) 3 Unused capital loss carryover (attach computation)

Net short-term capital gain or (loss). Combine lines 1 through 3. (See instructions.)

5

Long-Term Capital Gains and Losses—Assets Held More Than One Year

6

7

Gain from Form 4797, line 8 or 10

7

8

Long-term capital gain from installment sales from Form 6252, line 26 or 37

8 Net long-term capital gain. Combine lines 5 through 7

11

9a

Net capital gain. Enter excess of net long-term capital gain (line 8) over net short-term capital loss

(line 4)

9a

b Capital gain dividends 9b

Undistributed capital gains. Subtract line 9b from line 9a 10

12

Amount of undistributed capital gains on line 10 designated under section 852(b)(3)(D) 11

13 Capital gains tax. Multiply line 11 by 35% (.35). (See instructions.) 13

Part II

Part I

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge Please and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.

Sign

Here © Signature of officer Date Title

Date Preparer’s social security number Preparer’s

signature

Check if selfemployed ©

Paid

Preparer’s

Use Only

Firm’s name (or

yours if self-employed)

and address

EIN ©

ZIP code ©

For Paperwork Reduction Act Notice, see instructions on back. Cat. No. 11856I Form 2438 (1996)

©

©

©

(d) Sales price

(see instructions)

Amount of undistributed capital gains not designated under section 852(b)(3)(D). Subtract line 11

from line 10. (See instructions.) 12

4 4

10

6

Part III Summary of Parts I and II

96
Form 2438 (1996) Page 2

General Instructions

Section references are to the Internal

Revenue Code.

Paperwork Reduction Act Who Must Sign

Notice Form 2438 must be signed and dated by the

president, vice president, treasurer, assistant

treasurer, chief accounting officer, or by any

other corporate officer (such as tax officer)

authorized to sign. Receivers, trustees, or

assignees must also sign and date any return

filed on behalf of a fund.

We ask for the information on this form to

carry out the Internal Revenue laws of the

United States. You are required to give us the

information. We need it to ensure that you are

complying with these laws and to allow us to

figure and collect the right amount of tax.

Period covered.—File the 1996 return for

calendar year 1996 and fiscal years that

begin in 1996 and end in 1997. For a fiscal

year, fill in the tax year space at the top of

the form.

The time needed to complete and file this

form will vary depending on individual

circumstances. The estimated average time

is:

Note: If this return is being filed for a series

fund (discussed in section 851(h)), the return

may be signed by any officer authorized to

sign for the RIC in which the fund is a series.

Rounding Off to Whole Dollars

The fund may show amounts on the return as

whole dollars. To do so, drop any amount

less than 50 cents and increase any amount

from 50 cents through 99 cents to the next

higher dollar.

Recordkeeping 7 hr., 39 min.

If a corporate officer completes Form 2438,

the Paid Preparer’s space should remain

blank. Anyone who prepares Form 2438 but

does not charge the fund should not sign the

return. Generally, anyone who is paid to

prepare Form 2438 must sign it and fill in the

Paid Preparer’s Use Only area.

Learning about the

law or the form 35 min.

Preparing and sending

the form to the IRS 45 min.

Penalty for Late

Filing of Return

If you have comments concerning the

accuracy of these time estimates or

suggestions for making this form simpler, we

would be happy to hear from you. You can

write to the Tax Forms Committee, Western

Area Distribution Center, Rancho Cordova,

CA 95743-0001. DO NOT send the tax form

to this office. Instead, see When and Where

To File below. A fund that does not file its tax return by the

due date, including extensions, may be

penalized 5% of the unpaid tax for each

month or part of a month the return is late,

up to a maximum of 25% of the unpaid tax.

The minimum penalty for a return that is more

than 60 days late is the smaller of the tax due

or $100. The penalty will not be imposed if

the fund can show that the failure to file on

time was due to reasonable cause. Funds

that file late must attach a statement

explaining the reasonable cause.

Penalty for Late

Payment of Tax

● Sign the return, by hand, in the space

provided for the preparer’s signature

(signature stamps and labels are not

acceptable).

Purpose of Form

Form 2438 is used only by regulated

investment companies (RICs) to figure income

tax on undistributed capital gains designated

under section 852(b)(3)(D). If a RIC has more

than one fund, each fund must file a separate

Form 2438. The term “fund” as used in these

instructions refers to the definition in section

851(h) and to any RIC that does not have

more than one portfolio of assets.

Specific Instructions

Address.—Include the suite, room, or other

unit number after the street address. If the

Post Office does not deliver mail to the street

address and the fund has a P.O. box, show

the box number instead of the street address.

Depository Method

of Tax Payment Line 4

Form 8109, Federal Tax Deposit Coupon.—

If the fund does not use EFTPS, deposit fund

income tax payments with Form 8109,

Federal Tax Deposit Coupon. Do not send

deposits directly to an IRS office. Mail or

deliver the completed Form 8109 with the

payment to a qualified depositary for Federal

taxes or to the Federal Reserve bank (FRB)

servicing the fund’s geographic area. Make

checks or money orders payable to that

depositary or FRB.

See the instructions for Schedule D (Form

1120), Capital Gains and Losses, for a

definition of capital assets and other

information on figuring and reporting capital

gains and losses.

If the fund has any net short-term capital gain

on line 4, enter it on line 1 of Schedule D

(Form 1120). Report this amount as “Net

short-term capital gain from line 4, Form

2438.” For information on reporting a

short-term capital loss, see the Schedule D

When and Where To File (Form 1120) instructions.

File the original of Form 2438 by the 30th day

after the end of the fund’s tax year. File the

form with the same Internal Revenue Service

Center where the fund will file its Form

1120-RIC, U.S. Income Tax Return for

Regulated Investment Companies. Attach a

copy of Form 2438 to the fund’s Form

1120-RIC. Line 13

A fund that does not pay the tax when due

may be penalized 1⁄2 of 1% of the unpaid tax

for each month or part of a month the tax is

not paid, up to a maximum of 25% of the

unpaid tax. The penalty will not be imposed if

the fund can show that the failure to pay on

time was due to reasonable cause.

A penalty may be imposed if the deposits

are mailed or delivered to an IRS office rather

than to an authorized depositary or FRB.

● Give a copy of Form 2438 to the taxpayer.

The paid preparer must complete the

required preparer information and:

Enter the amount from line 12 on line 6 of

Schedule D (Form 1120). Report this amount

as “Undistributed capital gains not

designated under section 852(b)(3)(D) from

Form 2438.”

Line 12

To help ensure proper crediting, write the

fund’s employer identification number, the tax

period to which the deposit applies, and

“Form 1120-RIC” on the fund’s check or

money order. Be sure to darken the “1120”

box on the coupon. Records of these

deposits will be sent to the IRS.

Caution: If the fund owes tax when it files

Form 2438, do not include the payment with

the tax return. Instead, mail or deliver the

payment with Form 8109 to a qualified

depositary or FRB or use the EFTPS if

applicable.

Lines 1 and 5

Column (d).—Enter either the gross sales

price or the net sales price. If the net sales

price is entered, do not increase the cost or

other basis in column (e) by any expenses

reflected in the net sales price.

Column (e).—If the gross sales price is

reported in column (d), increase the cost or

other basis by any expense of sale such as

broker’s fees, commissions, or option

premiums before entering an amount in

column (e).

Deposit the tax due by the 30th day after the

end of the fund’s tax year.

You are not required to provide the

information requested on a form that is

subject to the Paperwork Reduction Act

unless the form displays a valid OMB control

number. Books or records relating to a form

or its instructions must be retained as long as

their contents may become material in the

administration of any Internal Revenue law.

Generally, tax returns and return information

are confidential, as required by Code section

6103.

A Change To Note

If a fund’s total deposits of social security,

Medicare, and withheld income taxes were

more than $50,000 in 1995, the fund must

make electronic deposits for all depository tax

liabilities that occur after June 30, 1997. For

details, see Depository Method of Tax

Payment below.

Electronic deposit requirement.—If the

fund’s total deposits of social security,

Medicare, and withheld income taxes were

more than $50,000 in 1995, the fund must

make electronic deposits for all depository tax

liabilities that occur after June 30, 1997. If the

fund was required to deposit by electronic

funds transfer in prior years, continue to do

so in 1997. The Electronic Federal Tax

Payment System (EFTPS) must be used to

make electronic deposits. If the fund is

required to make deposits by electronic funds

transfer and fails to do so, it may be subject

to a 10% penalty. Funds that are not required

to make electronic deposits may voluntarily

For more information on deposits, see the

instructions in the coupon booklet (Form

8109) and Pub. 583, Starting a Business and

Keeping Records.

Some funds (described below) are required to

electronically deposit all depository taxes,

including corporation income tax payments.

participate in EFTPS. For information on

EFTPS, call 1-800-945-8400 or

1-800-555-4477. (These numbers are for

EFTPS information only.)