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What is Form 1099-S?

Form 1099-S is used to report closed sale or exchange of real estate and certain royalty payments during a particular tax year. Some real estate transactions can include a sale of land or exchange for money, indebtedness, commercial and industrial buildings, as well as residential properties, such as a home or condominium. The filer can consult a tax professional since the proceeds realized from a real estate transaction could be exempt from taxes, depending on the taxpayer’s particular financial situation.

If the filer received a 1099-S for the sale of a timeshare or vacation home, then the sale is a personal capital asset and is reportable on a Form 8949 and Schedule D. A gain on this type of sale is considered as the reportable income.

1099-S forms must be mailed to recipients by February 15 and e-filed with the IRS by March 31 each year.

How to File IRS Form 1099-S?

To file your Form 1099-S you will need:

Taxpayer’s (FILER/TRANSFEROR) information
Account number
Date of closing
Gross proceeds
Address or legal description
Transferor details
Buyer’s part of real estate tax

As with all tax records, the filer may hold onto the form for a minimum of three years. The account number is required if the filer has multiple accounts for a recipient for whom may need to file more than one 1099-S form.

Instructions for Recipient:

Box 1: Date of closing
Box 2: Gross proceeds
Box 3: Address

Box 4: Transferor received
Box 5: Transferor is a foreign person
Box 6: Buyer’s part of real estate tax

Who can use Form 1099-S?

If the filer is considered a buyer, they may include a clause in their purchase agreement that identifies the seller as the responsible party for any IRS reporting that is required as a result of their receipt of funds related to the transaction. The filler can also ask the seller to complete an IRS Form W-9 as part of their closing package, which will include all the information that is needed to complete a 1099-S.

If the filer is a seller, the seller can file for a form 1099-S since the filler would obtain the required information to file a form. A seller will also have to complete a 1096 transmittal form with all of their information if needed. A copy of the 1099 certification form is presented to the sellers at closing. Form 1099-S obtains three copies of the form the first copy will be for the IRS the second is for the Transferor and the last copy is for the filler.

When is the Form 1099-S deadline?

Filing Type	Deadline
Recipient Copy	January 31
IRS Paper Filing	February 28
IRS Electronic Filing	March 31

Note: If the due date/deadline falls on a Saturday, Sunday, or federal holiday, the filer will need to E-file on the next business day.

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