Business structures change frequently. Whether a company is acquired by a corporation or their capital structure changes, a lot of work goes into ensuring things move quickly and efficiently. When businesses change hands, though, assets may be divided and siphoned off to different shareholders. If this happens, you’ll need to document those transactions and report them to the IRS.
The 1099-CAP is designed specifically to report this kind of payment, stock, or property. This may seem like a niche transaction or happening, but it is an essential piece of every acquisition or corporate structural change. When you need to use this form, you don’t want to be left without support. Advanced Micro Solutions can provide the help you need to report any transactions that result in your business transition.
What You Need to Know about 1099-CAP
Form 1099-CAP is also known as the Changes in Corporate Control and Capital Structure form. Its function is exactly what its name implies. Put simply, Form 1099-CAP is provided to shareholders who receive cash, stock, or another type of property from the acquisition of a company or a substantial change to its structure.
There are several instructions specific to this type of 1099. For example, corporations should not file Form 1099-CAP if the transaction involves one of the following conditions:
- The corporation properly reports the transaction under section 6043(a) on Form 966.
- Information returns are filed under section 6042 on Form 1099-DIV or section 6045 on Form 1099-B.
- The transaction involves the acquisition of control with an affiliated group or involves stock valued at less than $100 million.
- The corporation makes the consent election on Form 8806.
For a full set of instructions, see the IRS’s online instructions. Form 1099-CAP filing is just one piece of the puzzle when businesses change hands. Keep in mind that the 1099-CAP form underwent revisions in September of 2019. If you have not completed this form since then, the structure and visual layout will be slightly different from what you are used to using.
1099-CAP Software Support is Important
Much of the work involved in filing 1099-CAP is in determining if you should file and to whom you should furnish the form. When it comes to filling out the form itself, the process is straightforward. You will need to include basic personal information about the corporation and shareholder, as well as the assets exchanged.
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This is what makes 1099-CAP software support so important. Once the hard part is over, you don’t want to risk slipping up while filing. With AMS 1099 support tools, you’ll quickly and easily complete this form without the risk of a mistake.
Software for 1099-CAP Form Filing
The best Form 1099-CAP support comes with our W2 and 1099 Software platform. This tool provides essential features for reporting, data entry, printing, security, and networking features, as well as a long list of other 1099s. The software comes complete with several resources and the ability to respond to any 1099 developments.
If you’re curious to find out how AMS can support your 1099-CAP filing, give our Sales and Information Team a call at 800-536-1099. We’re always happy to answer questions and talk about how our software tool can make your life easier.