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

3. Designation agreement. You can enter into a written

If no gross proceeds are allocated to a transferor because no

agreement at or before closing to designate who must file Form

allocation or an incomplete allocation is received, you must

1099-S for the transaction. The agreement will identify the

report the total unallocated gross proceeds on the Form 1099-S

person responsible for filing if such designated person signs the

made for that transferor. If you do not receive any allocation or

agreement. It is not necessary that all parties to the transaction

you receive conflicting allocations, report on each transferor's

(or that more than one party) enter into the agreement.

Form 1099-S the total unallocated gross proceeds.

You may be designated in the agreement as the person who

Spouses. If the transferors were spouses at the time of closing,

must file if you are the person responsible for closing the

who held the property as joint tenants, tenants by the entirety,

transaction (as explained in (1) under Who Must File, earlier),

tenants in common, or as community property, treat them as a

the transferee's or transferor's attorney (as explained in (1)

single transferor. Only one Form 1099-S showing either of them

under Who Must File, earlier), the title or escrow company that is

as the transferor is required. You need not request an allocation

most significant in disbursing gross proceeds, or the mortgage

of gross proceeds if spouses are the only transferors. But if you

lender (as explained in (2a) under Who Must File, earlier).

receive an uncontested allocation of gross proceeds from them,

file Form 1099-S for each spouse according to the allocation. If

The designation agreement may be in any written form and

there are other transferors, you must make a reasonable effort to

may be included on the closing statement. It must:

contact either spouse to request an allocation.

a. Identify by name and address the person designated as

responsible for filing,

Partnerships. If the property is transferred by a partnership, file

only one Form 1099-S for the partnership, not separate Forms

b. Include the names and addresses of each person

1099-S for each partner.

entering into the agreement,

c. Be signed and dated by all persons entering into the

Multiple Assets Sold

agreement,

If real estate is sold or exchanged and other assets are sold or

d. Include the names and addresses of the transferor and

exchanged in the same transaction, report the total gross

transferee, and

proceeds from the entire transaction on Form 1099-S.

e. Include the address and any other information necessary

Taxpayer Identification Numbers (TINs)

to identify the property.

You must request the transferor's TIN no later than the time of

Each person who signs the agreement must keep it for 4 years.

closing. The TIN request need not be made in a separate

For each transaction, be sure that only one person is

mailing. Rather, it may be made in person, in a mailing that

responsible for filing and that only one Form 1099-S is

TIP

includes other items, or electronically. The transferor is required

filed for each transferor.

to furnish his or her complete, non-truncated TIN and to certify

that the TIN is correct. For U.S. persons (including U.S. resident

Employees, Agents, and Partners

aliens), you may request a TIN on Form W-9, Request for

Taxpayer Identification Number and Certification. Foreign

If an employee, agent, or partner, acting within the scope of such

persons may provide their TIN to you on the appropriate Form

person's employment, agency, or partnership, participates in a

W-8. See part J in the 2017 General Instructions for Certain

real estate transaction, only the employer, principal, or

Information Returns.

partnership (not the employee, agent, or partner) may be the

reporting person. However, the participation of a person listed

Alternatively, you may provide a written statement to the

on the HUD-1 as the settlement agent acting as an agent of

transferor similar to the following: “You are required by law to

another is not attributed to the principal.

provide (insert name of person responsible for filing) with your

correct taxpayer identification number. If you do not provide

Foreign Transferors

(insert name of person responsible for filing) with your correct

Sales or exchanges involving foreign transferors are reportable

taxpayer identification number, you may be subject to civil or

on Form 1099-S. For information on the transferee's

criminal penalties imposed by law.”

responsibility to withhold income tax when a U.S. real property

The solicitation must contain space for the name, address,

interest is acquired from a foreign person, see Pub. 515,

and TIN of the transferor, and a place to certify under penalties

Withholding of Tax on Nonresident Aliens and Foreign Entities.

of perjury that the TIN furnished is the correct TIN of the

Multiple Transferors

transferor. The certification must read similar to: “Under

penalties of perjury, I certify that I am a U.S. person or U.S.

For multiple transferors of the same real estate, you must file a

resident alien and the number shown on this statement is my

separate Form 1099-S for each transferor. At or before closing,

correct taxpayer identification number.”

you must request from the transferors an allocation of the gross

proceeds among the transferors. The request and the response

If you use a HUD-1, you may provide a copy of such

are not required to be in writing. You must make a reasonable

statement, appropriately modified to solicit the TIN, to the

effort to contact all transferors of whom you have knowledge.

transferor. Keep the Form W-9, W-8, or substitute form in your

However, you may rely on the unchallenged response of any

records for 4 years.

transferor, and you need not make additional contacts with other

transferors after at least one complete allocation is received

Separate Charge Prohibited

(100% of gross proceeds, whether or not received in a single

You may not charge your customers a separate fee for

response). If you receive the allocation, report gross proceeds

complying with the Form 1099-S filing requirements. However,

on each Form 1099-S accordingly.

you may take into account the cost of filing the form in setting the

fees you charge your customers for services in a real estate

You are not required to, but you may, report gross proceeds

transaction.

in accordance with an allocation received after the closing date

but before the due date of Form 1099-S (without extensions).

Statements to Transferors

However, you cannot report gross proceeds in accordance with

an allocation received on or after the due date of Form 1099-S

If you are required to file Form 1099-S, you must furnish a

(without extensions).

statement to the transferor. Furnish a copy of Form 1099-S or an

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Instructions for Form 1099-S (2017)

Instructions For Form 1099-S - Proceeds From Real Estate Transactions - 2017 Page 3

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