Important Changes

Reporting capital gain distributions on Form 1040A. For 2000, you may be able to report your capital gain distributions from mutual funds on Form 1040A, instead of on Form 1040. A worksheet in the Form 1040A instructions is used to figure the tax. For details, see Reporting Capital Gains and Losses in chapter 4.

Definition of noncapital assets expanded. The definition of noncapital assets (assets that generally produce ordinary rather than capital gain or loss when sold) has been expanded to include three additional categories of assets. These are listed in chapter 4 under Capital Assets and Noncapital Assets.

Constructive ownership transactions. If you have a gain from a constructive ownership transaction entered into after July 11, 1999, involving certain financial assets and the gain normally would be treated as a long-term capital gain, all or part of the gain may be treated as ordinary income. For more information, see Gains From Certain Constructive Ownership Transactions in chapter 4.

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800- 843-5678) if you recognize a child.

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