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

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

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

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

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

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

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

most significant in disbursing gross proceeds, or the mortgage

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

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

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

The designation agreement may be in any written form and

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

may be included on the closing statement. It must:

receive an uncontested allocation of gross proceeds from them,

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

a. Identify by name and address the person designated as

DRAFT AS OF

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

responsible for filing,

contact either spouse to request an allocation.

b. Include the names and addresses of each person

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

entering into the agreement,

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

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

1099-S for each partner.

agreement,

d. Include the names and addresses of the transferor and

July 21, 2015

Multiple Assets Sold

transferee, and

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

e. Include the address and any other information necessary

exchanged in the same transaction, report the total gross

to identify the property.

proceeds from the entire transaction on Form 1099-S.

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

Taxpayer Identification Numbers (TINs)

For each transaction, be sure that only one person is

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

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

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

TIP

filed for each transferor.

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

includes other items, or electronically. The transferor is required

Employees, Agents, and Partners

to furnish his or her TIN and to certify that the TIN is correct. For

U.S. persons (including U.S. resident aliens), you may request a

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

TIN on Form W-9, Request for Taxpayer Identification Number

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

and Certification. Foreign persons must provide their TIN to you

real estate transaction, only the employer, principal, or

on the appropriate Form W-8. See part J in the 2016 General

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

Instructions for Certain Information Returns.

reporting person. However, the participation of a person listed

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

Alternatively, you may provide a written statement to the

another is not attributed to the principal.

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

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

Foreign Transferors

correct taxpayer identification number. If you do not provide

Sales or exchanges involving foreign transferors are reportable

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

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

taxpayer identification number, you may be subject to civil or

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

criminal penalties imposed by law.”

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

The solicitation must contain space for the name, address,

Withholding of Tax on Nonresident Aliens and Foreign Entities.

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

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

Multiple Transferors

transferor. The certification must read similar to: “Under

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

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

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

resident alien and the number shown on this statement is my

you must request from the transferors an allocation of the gross

correct taxpayer identification number.”

proceeds among the transferors. The request and the response

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

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

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 or substitute form in your records

However, you may rely on the unchallenged response of any

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

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

You may not charge your customers a separate fee for

on each Form 1099-S accordingly.

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

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

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

fees you charge your customers for services in a real estate

in accordance with an allocation received after the closing date

transaction.

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

However, you cannot report gross proceeds in accordance with

Statements to Transferors

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

If no gross proceeds are allocated to a transferor because no

acceptable substitute statement to each transferor. For more

allocation or an incomplete allocation is received, you must

information about the requirement to furnish a statement to the

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

transferor, see part M in the 2016 General Instructions for

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

Certain Information Returns.

you receive conflicting allocations, report on each transferor's

Form 1099-S the total unallocated gross proceeds.

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Instructions for Form 1099-S (2016)

Instructions For Form 1099-S Draft - Proceeds From Real Estate Transactions - 2016 Page 4

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