IRS Form 1099-s

The IRS Form 1099-S is used to report transfers of interest in real estate. The form is used to report a wide variety of transfers, including transfers of stock in corporations, or transfers of partial interests in real property, but the situation encountered by most people is the sale of a home that may or may not be the primary residence of the seller.

If you are the seller of the property, then you are not required to file the IRS Form 1099-S, although you may be required to report the transaction when you file your tax return. If the gain from the sale of the home is excusable from your gross income under Section 121 (which you should verify with your accountant or attorney), then you may want to provide a certification to this effect, signed under penalty of perjury. If you do provide the certification, a Form 1099-S will not need to be filed for the transaction, and you will not need to report the transaction on your tax return. If you do not or cannot provide the certification, then a Form 1099-S must be filed. If a Form 1099-S is filed for the transaction, then you should make sure that you receive a copy of this form, because you will be required to report the transaction on your tax return. This is true even if the gain from the sale is ultimately excusable from your income.

If you are the purchaser of the home, then it may be ultimately your responsibility to either collect the seller’s certification mentioned above, or to file a IRS Form 1099-S for the transaction. The IRS has guidelines that list, in a specific order, the people who are responsible for filing a IRS Form 1099-S, and at the end of the list is you – the purchaser. If there is a closing statement for the transaction, then this statement will specify the person responsible for closing the transaction, who is also the person responsible for filing the IRS Form 1099-S. If there is no closing statement, but a bank, a broker, or an attorney is involved in the transaction, the one of these people or entities will most likely be responsible for filing the Form 1099-S, in accordance with IRS guidelines. However, as the purchaser, you should always make sure that you clearly understand whether a Form 1099-S must be filed and, if so, who must do it – because it could be you.

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