A capital gains distribution reported in box 2a of Form 1099-DIV represents your share of capital gains that are a result of the mutual fund selling some of its holdings for a gain. The capital gains distribution is taxable to you even if you never sold anything or received any actual income from the mutual fund.
The only thing you can do on your tax return is to enter the amount reported in box 2a in the dividends section of your return. There is nothing you can enter to offset that income.
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