1099-S Reporting

The Tax Reform Act of 1986 requires the person (including any attorney or title company) who is responsible for closing to report his/her real estate transactions to the I.R.S. The burden of reporting may fall on the buyer's attorney, the seller's attorney, the title company or the mortgage lender. The report must be filed on a Form 1099-S and submitted to the I.R.S. with a copy provided to the seller by January 31 of the year following the transaction.

If you are required to report real estate transactions, you may also be required to file the returns on magnetic media or by electronic transfer depending upon the number of returns you file in a given year.

Penalties may be imposed for the failure to file returns when necessary and for the failure to include the correct information on a return. Additional penalties may be imposed for failing to file on magnetic media or by electronic transfer when required by regulations. However, the regulations for filing returns on magnetic media or by electronic transfer are complicated and are generally revised annually to reflect format and regulatory changes.

With a long history of service to lawyers, title companies and lending institutions, the Charles Jones 1099 Reporting Service fulfills the need for a convenient and inexpensive service from a reliable source.

Commonly asked questions

Where do we file the "Exclusion of Principal Residence Form"?
Answer: The Certification Form must be retained by the closing agent for four years following the settlement. No reporting is required for any seller who is able to respond "YES" to the questions in part II. However, if a "NO" response is made, a 1099-S must be filed.

Does an Estate have to file a 1099?
Answer: YES --Unless the executor, on behalf of the deceased, signs and answers "YES" to all questions in Part II on the Exclusion of Principal Residence form.

Does a Partnership or LLC have to file a 1099?
Answer: YES. Only corporations are exempt from the filing requirement.

Do I have to report the sale of vacant land?
Answer: YES.

Can I list a brother and sister together?
Answer: NO, a separate 1099-S is required for all sellers who are not husband and wife at the time of the closing.

Do we have to report if the seller is a builder?
Answer: YES, unless the builder is a corporation

What is the Allocated Gross Proceeds?
Answer: The Allocated Gross Proceeds refer to a case involving multiple sellers who are not husband and wife. Determine the allocation of the proceeds among the parties. List each percentage in a dollar amount on the allocated gross proceeds line. For example if the parties are splitting the proceeds 50/50, the allocation would be one half of the sale price.

This information is meant for information purposes only. For legal advice, consult a qualified legal professional.



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