Instructions For Form 1099-S - Proceeds From Real Estate Transactions

Who Must File

included in Rev. Proc. 2007-12 does not include an

assurance, as required by section 6045(e)(5)(A)(iii), that the

Generally, the person responsible for closing the transaction,

full amount of the gain from the sale is excludable under

as explained in 1 below, is required to file Form 1099-S. If no

section 121.

one is responsible for closing the transaction, the person

required to file Form 1099-S is explained in 2, later. However,

You may get the certification any time on or before

you may designate the person required to file Form 1099-S in

February 15 of the year after the year of sale. You may rely

a written agreement, as explained under 3, later.

on the certification and not file or furnish Form 1099-S unless

you know that any assurance on the certification is incorrect.

1. If you are the person responsible for closing the

transaction, you must file Form 1099-S. If a Uniform

You must keep the certification for 4 years after the year of

Settlement Statement prescribed under the Real Estate

sale. You may keep the certification on paper, microfilm,

Settlement Procedures Act of 1974 (RESPA) is used and a

microfiche, or in an electronic storage system.

person is listed as the settlement agent on the statement, the

You are not required to obtain the certification. However, if

person responsible for closing the transaction is the person

you do not obtain it, you must file and furnish Form 1099-S.

listed as the settlement agent on that statement. A Uniform

2. Any transaction in which the transferor is a corporation

Settlement Statement includes any amendments, variations,

(or is considered to be a corporation under Regulations

or substitutions that may be prescribed under RESPA if any

section 1.6045-4(d)(2)); a governmental unit, including a

such form requires disclosure of the transferor and

foreign government or an international organization; or an

transferee, the application of the proceeds, and the identity of

exempt volume transferor. Under this rule, if there are

the settlement agent or other person responsible for

exempt and nonexempt transferor, you must file Form

preparing the form.

1099-S only for the nonexempt transferor.

If a Uniform Settlement Statement is not used, or no

An exempt volume transferor is someone who sold or

settlement agent is listed, the person responsible for closing

exchanged during the year, who expects to sell or exchange

the transaction is the person who prepares the closing

during the year, or who sold or exchanged in either of the 2

statement, including a settlement statement (including a

previous years at least 25 separate items of reportable real

Uniform Settlement Statement) or other written document

estate to at least 25 separate transferees. In addition, each

that identifies the transferor and transferee, reasonably

item of reportable real estate must have been held, at the

identifies the real estate transferred, and that describes how

date of closing, or will be held, primarily for sale or resale to

the proceeds are to be or were disbursed.

customers in the ordinary course of a trade or business. You

If no closing statement is used, or if two or more

are not required to report an exempt volume transferor's

statements are used, the person responsible for closing the

transactions if you receive the penalties of perjury

transaction is, in the following order:

certification required by Regulations section 1.6045-4(d)(3).

a. The transferee's attorney who is present at the delivery

3. Any transaction that is not a sale or exchange,

of either the transferee's note or a significant part of the cash

including a bequest, a gift (including a transaction treated as

proceeds to the transferor or who prepares or reviews the

a gift under section 1041), and a financing or refinancing that

preparation of the documents transferring legal or equitable

is not related to the acquisition of real estate.

ownership;

4. A transfer in full or partial satisfaction of a debt

b. The transferor's attorney who is present at the delivery

secured by the property. This includes a foreclosure, a

of either the transferee's note or a significant part of the cash

transfer in lieu of foreclosure, or an abandonment.

proceeds to the transferor or who prepares or reviews the

5. A de minimis transfer for less than $600. A transaction

preparation of the documents transferring legal or equitable

is de minimis if it can be determined with certainty that the

ownership; or

total money, services, and property received or to be

c. The disbursing title or escrow company that is most

received is less than $600, as measured on the closing date.

significant in disbursing gross proceeds.

For example, if a contract for sale provides for total

consideration of “$1.00 plus other valuable consideration,”

If there is more than one attorney described in (a) or (b),

the transfer is not a de minimis transfer unless you can

the one whose involvement is most significant is the person

determine that the “other valuable consideration” is less than

considered responsible for closing the transaction.

$599, as measured on the closing date. The $600 rule

2. If no one is responsible for closing the transaction as

applies to the transaction as a whole, not separately to

explained in 1 on this page, the person responsible for filing

each transferor.

is, in the following order: (a) the mortgage lender, (b) the

transferor's broker, (c) the transferee's broker, or (d) the

No reporting is required for the sale or exchange of an

transferee.

interest in the following types of property, provided the sale is

not related to the sale or exchange of reportable real estate.

For purposes of 2 above, apply the following definitions.

An interest in surface or subsurface natural resources (for

a. Mortgage lender means a person who lends new

example, water, ores, or other natural deposits) or crops,

funds in connection with the transaction, but only if the loan is

whether or nor such natural resources or crops are severed

at least partially secured by the real estate. If there is more

from the land. For this purpose, the terms "natural resources"

than one lender, the one who lends the most new funds is the

and "crops" do not include standing timber. For timber

mortgage lender. If several lenders advance equal amounts

royalties, see Timber on page 1.

of new funds, and no other person advances a greater

A burial plot or vault.

amount of new funds, the mortgage lender is the one who

A manufactured structure used as a dwelling that is

has the security interest that is most senior in priority.

manufactured and assembled at a location different from that

Amounts advanced by the transferor are not treated as new

where it is used, but only if such structure is not affixed, on

funds.

the closing date, to a foundation. This exception applies to

b. Transferor's broker means the broker who contracts

the transfer of an unaffixed mobile home that is unrelated to

with the transferor and who is compensated for the

the sale or exchange of reportable real estate.

transaction.

c. Transferee's broker means the broker who significantly

participates in the preparation of the offer to acquire the

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Instructions for Form 1099-S (2013)

Instructions For Form 1099-S - Proceeds From Real Estate Transactions - 2013 Page 2

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