Form 1099-CAP: Changes in Corporate Control and Capital Structure
Published November 5, 2026
Sometimes a corporation is bought, merged, or changes its stock setup. Shareholders may receive cash, stock, or other property in that deal. If this happens, the corporation may send you a Form 1099-CAP. The form reports the exchange. It does not say how much tax you owe.
This guide is general information. It is not advice about your own transaction. For a deal that involves your shares, read the notice you received and ask a tax professional.
When the form is sent
The IRS instructions say the corporation must send this statement by January 31 of the year after the year of the change. The corporation sends it when it has reasonably determined that you may need to recognize gain. The gain comes from the cash, stock, or other property you received for your shares.
The corporation does not have to send the form to every shareholder. For example, it does not have to send one to a shareholder whose cash and stock together are $1,000 or less. Some other types of shareholders are also exempt. The tax rules still apply, even if you do not get a form.
What each box shows
- Box 1 shows the date the stock was exchanged.
- Box 2 shows the total cash plus the fair market value of any stock or other property you received.
- Box 3 shows how many of your shares were exchanged.
- Box 4 shows the class or classes of stock exchanged.
- Box 5 may show an account number the corporation used to track your holding.
How to report the deal
The IRS says you report any gain from the exchange on Form 8949. You cannot claim a loss from this exchange, even if the amount in Box 2 is less than what you paid for your shares. Read the Form 8949 instructions before you fill it out. Also read Chapter 4 of IRS Publication 550, which the instructions name for more detail.
Copy B and why it matters
Copy B is the copy for you. The form says it is important tax information and is being sent to the IRS. If you are required to file a return, a penalty may apply if the transaction has taxable income and the IRS finds it was not reported.
Check the form
Compare the date and share count with your broker or transfer records. Check the amount in Box 2 against the deal papers. Check the number of shares in Box 3 against the shares you held before the deal. Box 4 should name the class you held, such as common or preferred stock. If a number looks wrong, ask the corporation for a corrected form.
Key terms
- Shareholder means a person who owns stock in the corporation.
- Exempt recipient means a shareholder the corporation does not have to report to. The instructions list types such as tax-exempt organizations, individual retirement accounts (IRAs), the U.S. government or a state, banks and other financial institutions, and regulated investment companies.
- Fair market value is the value of stock or other property when you receive it.
Exempt status can change how the deal is reported. If you think a form was sent by mistake, or that one was missed, ask the corporation to check its records.
Next steps
Keep the form and the deal papers together, along with any letter from the corporation. Write down the deal date and the number of shares you held. Use the Form 8949 instructions to report any gain. If the deal is complex, or the numbers do not match, ask a tax professional. For a basic guide to stock sales, read our guide to stock and crypto sales.
Sources: Sources: IRS, Form 1099-CAP (Rev. April 2025) and its Instructions for Form 1099-CAP (Rev. April 2025) (https://www.irs.gov/pub/irs-pdf/f1099cap.pdf; https://www.irs.gov/instructions/i1099cap); Instructions for Schedule D and Form 8949 (current year) This is general information, not advice about your specific return.
