1099S

The Form 1099-S, officially titled Proceeds From Real Estate Transactions, is an informational tax form used by the Internal Revenue Service (IRS). This form is primarily issued by the person or entity responsible for closing a real estate transaction, such as a title company, escrow agent, or attorney. Its purpose is to report the gross proceeds from the sale or exchange of real property to both the seller and the IRS.

When a piece of real estate is sold, the party handling the closing is required to file Form 1099-S if the transaction meets certain criteria. Generally, this includes the sale of a principal residence, vacation home, land, or any other type of real property. The form details the seller's name and address, the buyer's name and address, a description of the property, and the total gross proceeds received from the sale. It's important to note that the gross proceeds reported may not necessarily represent the seller's taxable gain. Adjustments for things like mortgage payoffs or seller concessions are typically not reflected on this initial form.

The information provided on Form 1099-S helps the IRS track real estate transactions and ensures that sellers report any capital gains or losses accurately on their income tax returns. Sellers should receive a copy of Form 1099-S by January 31st of the year following the sale. This document serves as a critical piece of documentation when calculating and reporting the tax implications of selling real estate.