ICI/Nareit Letter to IRS on Form 1099-DIV, Boxes 2e and 2f; 2021 Year-End Reporting Update
[33784]
September 22, 2021
TO:ICI Members
Accounting/Treasurers Committee
Bank, Trust and Retirement Advisory Committee
Bank-Affiliated Member Advisory Committee
Broker/Dealer Advisory Committee
Closed-End Investment Company Committee
Operations Committee
Tax Committee
Transfer Agent Advisory Committee
Tax RE: ICI/Nareit Letter to IRS on Form 1099-DIV, Boxes 2e and 2f; 2021 Year-End Reporting Update
The Investment Company Institute and Nareit submitted the attached letter to the Internal Revenue Service (IRS) requesting a delay to the mandatory use of the new boxes (2e and 2f) on IRS Form 1099-DIV to report section 897 gain attributable to US real property interests (USRPIs). The letter explains that a delay would enable regulated investment companies, brokers, and other intermediaries to make necessary changes to their systems to ensure that only relevant shareholders (i.e., US pass-through entities) receive this information. The letter also requests that temporary penalty relief be provided to payors if they in good faith attempt to comply with the new reporting obligations for this tax year. Finally, the letter recommends that the 1099-DIV instructions be clarified for both payors and recipients.
The 2021 Instructions for the Primary Layout have also been updated to note that section 897 gains (new boxes 2e and 2f) on IRS Form 1099-DIV are not required to be reported to US individuals. The Primary Layout spreadsheet has also been updated to remove the "(23+24+25)" reference in column 22 to be consistent with previous years and remove unnecessary confusion. The 2021 Year-End Tax Reporting layouts and instructions are available on the Tax Committee page under Additional Resources.
Katie Sunderland
Assistant General Counsel