Instructions For Form 1099-S - Proceeds From Real Estate Transactions - 2015

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2015
Department of the Treasury
Internal Revenue Service
Instructions for Form 1099-S
Proceeds From Real Estate Transactions
Section references are to the Internal Revenue Code unless
have a remaining term of at least 30 years, including any period
otherwise noted.
for which the holder may renew such rights, determined on the
date of closing. For example, a preexisting leasehold on a
Future Developments
building with an original term of 99 years and a remaining term of
35 years on the closing date is an ownership interest; however, if
For the latest information about developments related to Form
the remaining term is 10 years, it is not an ownership interest. An
1099-S and its instructions, such as legislation enacted after
ownership interest does not include any option to acquire real
they were published, go to
estate. An ownership interest also includes any contractual
Reminder
interest in a sale or exchange of standing timber for a lump-sum
payment that is fixed and not contingent.
In addition to these specific instructions, you should also use the
2015 General Instructions for Certain Information Returns.
Involuntary conversion. A sale of real estate under threat or
Those general instructions include information about the
imminence of seizure, requisition, or condemnation is generally
following topics.
a reportable transaction.
Who must file (nominee/middleman).
Timber. Report on Form 1099-S payments of timber royalties
When and where to file.
made under a pay-as-cut contract, reportable under section
Electronic reporting requirements.
6050N. For more information, see Announcement 90-129,
Corrected and void returns.
1990-48 I.R.B. 10.
Statements to recipients.
Taxpayer identification numbers.
Exceptions
Backup withholding.
The following is a list of transactions that are not reportable;
Penalties.
however, you may choose to report them. If you do, you are
Other general topics.
subject to the rules in these instructions.
You can get the general instructions from
1. Sale or exchange of a residence (including stock in a
form1099s
or by calling 1-800-TAX-FORM (1-800-829-3676).
cooperative housing corporation) for $250,000 or less if you
received an acceptable written assurance (certification) from the
Specific Instructions
seller that such residence is the principal residence (within the
meaning of section 121) of the seller and the full amount of the
File Form 1099-S, Proceeds From Real Estate Transactions, to
gain on such sale is excludable from gross income under section
report the sale or exchange of real estate.
121. If the certification includes an assurance that the seller is
married, the preceding sentence shall be applied by substituting
Reportable Real Estate
“$500,000” for “$250,000.” If there are joint sellers, you must
Generally, you are required to report a transaction that consists
obtain a certification from each seller (whether married or not) or
in whole or in part of the sale or exchange for money,
file Form 1099-S for any seller who does not make the
indebtedness, property, or services of any present or future
certification. The certification must be signed by each seller
ownership interest in any of the following:
under penalties of perjury.
1. Improved or unimproved land, including air space;
A sample certification format can be found in Revenue
Procedure 2007-12, 2007-4 I.R.B. 354, available at
2. Inherently permanent structures, including any
irb/2007-04_IRB/ar09.html.
residential, commercial, or industrial building;
3. A condominium unit and its appurtenant fixtures and
Rev. Proc. 2007-12 does not reflect changes made by
common elements, including land;
Public Law 110-289, section 3092(a), which added
!
section 121(b)(4 [sic (5)]). The sample certification
4. Stock in a cooperative housing corporation (as defined in
CAUTION
included in Rev. Proc. 2007-12 does not include an assurance
section 216); and
that there has been no period of nonqualified use (as that term is
5. Any non-contingent interest in standing timber.
defined in section 121(b)(4 [sic (5)])(C)) after December 31,
2008. Also, the sample certification included in Rev. Proc.
Sale or exchange. A sale or exchange includes any
2007-12 does not include an assurance, as required by section
transaction properly treated as a sale or exchange for federal
6045(e)(5)(A)(iii), that the full amount of the gain from the sale is
income tax purposes, even if the transaction is not currently
excludable under section 121.
taxable. For example, a sale of a main home may be a
reportable sale even though the transferor may be entitled to
You may get the certification any time on or before January
exclude the gain under section 121. But see Exceptions, later.
31 of the year after the year of sale. You may rely on the
Also, a transfer to a corporation that qualifies for nonrecognition
certification and not file or furnish Form 1099-S unless you know
of gain under section 351 is a reportable exchange. In addition, a
that any assurance on the certification is incorrect.
transfer under a land contract is reportable in the year in which
You must keep the certification for 4 years after the year of
the parties enter into the contract.
sale. You may keep the certification on paper, microfilm,
Ownership interest. An ownership interest includes fee simple
microfiche, or in an electronic storage system.
interests, life estates, reversions, remainders, and perpetual
You are not required to obtain the certification. However, if
easements. It also includes any previously created rights to
you do not obtain it, you must file and furnish Form 1099-S.
possession or use for all or part of any particular year (for
example, a leasehold, easement, or timeshare), if such rights
Nov 03, 2014
Cat. No. 27988X

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