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

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

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

significant in disbursing gross proceeds, or the mortgage lender

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

(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

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

responsible for filing,

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

includes other items, or electronically. The transferor is required

TIP

filed for each transferor.

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

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

Employees, Agents, and Partners

and Certification. Foreign persons must provide their TIN to you

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

on the appropriate Form W-8. See part J in the 2015 General

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

Instructions for Certain Information Returns.

real estate transaction, only the employer, principal, or

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

Alternatively, you may provide a written statement to the

reporting person. However, the participation of a person listed

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

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

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

another is not attributed to the principal.

correct taxpayer identification number. If you do not provide

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

Foreign Transferors

taxpayer identification number, you may be subject to civil or

criminal penalties imposed by law.”

Sales or exchanges involving foreign transferors are reportable

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

The solicitation must contain space for the name, address,

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

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

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

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

Withholding of Tax on Nonresident Aliens and Foreign Entities.

transferor. The certification must read similar to: “Under

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

Multiple Transferors

resident alien and the number shown on this statement is my

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

correct taxpayer identification number.”

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

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

you must request from the transferors an allocation of the gross

statement, appropriately modified to solicit the TIN, to the

proceeds among the transferors. The request and the response

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

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

for 4 years.

effort to contact all transferors of whom you have knowledge.

However, you may rely on the unchallenged response of any

Separate Charge Prohibited

transferor, and you need not make additional contacts with other

transferors after at least one complete allocation is received

You may not charge your customers a separate fee for

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

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

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

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

on each Form 1099-S accordingly.

fees you charge your customers for services in a real estate

transaction.

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

in accordance with an allocation received after the closing date

Statements to Transferors

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

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

However, you cannot report gross proceeds in accordance with

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

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

acceptable substitute statement to each transferor. For more

(without extensions).

information about the requirement to furnish a statement to the

If no gross proceeds are allocated to a transferor because no

transferor, see part M in the 2015 General Instructions for

allocation or an incomplete allocation is received, you must

Certain Information Returns.

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

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

You are not required to indicate on Form 1099-S that

you receive conflicting allocations, report on each transferor's

the transferor's (seller's) financing was federally

TIP

Form 1099-S the total unallocated gross proceeds.

subsidized. Also, you are not required to enter the

following:

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

Both total gross proceeds and the allocated gross proceeds

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

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

for a multiple transferor transaction (enter either one or the

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

other);

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Instructions for Form 1099-S (2015)

Instructions For Form 1099-S - Proceeds From Real Estate Transactions - 2015 Page 3

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