Form 1099-S is used to report the sale or exchange of present or future interests in real estate. It is generally filed by the person responsible for closing the transaction, but depending on the circumstances it might also be filed by the mortgage lender or a broker for one side or other in the transaction.
Transactions reported on Form 1099-S include the following:
- land, whether improved or unimproved;
- a permanent building;
- a condominium, including its fixtures and land;
- stock in a section 216 cooperative housing corporation;
- a non-contingent interest in standing timber, e.g., royalties under a pay-as-cut contract.
A taxpayer might not receive the form in these scenarios that involve real estate or a building:
- Sale of a main home for $250,000 or less if the seller is unmarried, or $500,000 or less if married, and the seller is excluding the entire gain from gross income (with some exceptions).
- A transaction that's not a sale or exchange, e.g., a gift, a bequest, or financing or refinancing that doesn't involve the exchange of real estate.
- A transaction to satisfy debt that is secured by the property, including foreclosure and abandonment.
- A transaction in which the total amount transferred is less than $600.
- A transaction in which the transferor is a government, a corporation, or an "exempt volume transferor" (as defined in the Form 1099-S instructions).
- An interest in natural resources other than standing timber.
- A burial plot or vault.
- A building that's not affixed to the ground, e.g., a mobile home.
Form 1099-S reports two bits of information - the date of sale and the gross proceeds of the transaction - and it has been sent to the IRS, so a taxpayer who has received one must report it on their tax return.
Sale of business property is reported on Form 4797, otherwise the transaction is reported on Form 8949.
Note: This article provides general information on IRS Form 1099-S. It is not intended as tax advice.
Additional Information:
IRS: Instructions for Form 1099-S, Proceeds from Real Estate Transactions