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

2018

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

of gain under section 351 is a reportable exchange. In addition, a

otherwise noted.

transfer under a land contract is reportable in the year in which

the parties enter into the contract.

Future Developments

Ownership interest. An ownership interest includes fee simple

For the latest information about developments related to Form

interests, life estates, reversions, remainders, and perpetual

1099-S and its instructions, such as legislation enacted after

easements. It also includes any previously created rights to

they were published, go to IRS.gov/Form1099S.

possession or use for all or part of any particular year (for

What’s New

example, a leasehold, easement, or timeshare), if such rights

have a remaining term of at least 30 years, including any period

for which the holder may renew such rights, determined on the

Online pdf fillable Copies B and C. To ease statement

date of closing. For example, a preexisting leasehold on a

furnishing requirements, Copies B and C have been made

building with an original term of 99 years and a remaining term of

fillable online in a pdf format available at IRS.gov/Form1099S.

35 years on the closing date is an ownership interest; however, if

You can complete these copies online for furnishing statements

the remaining term is 10 years, it is not an ownership interest. An

to recipients and for retaining in your own files.

ownership interest does not include any option to acquire real

Reminder

estate. An ownership interest also includes any contractual

interest in a sale or exchange of standing timber for a lump-sum

In addition to these specific instructions, you should also use the

payment that is fixed and not contingent.

2018

General Instructions for Certain Information

Returns.

Those general instructions include information about the

Involuntary conversion. A sale of real estate under threat or

following topics.

imminence of seizure, requisition, or condemnation is generally

Who must file (nominee/middleman).

a reportable transaction.

When and where to file.

Timber. Report on Form 1099-S payments of timber royalties

Electronic reporting requirements.

made under a pay-as-cut contract, reportable under section

Corrected and void returns.

6050N. For more information, see Announcement 90-129,

Statements to recipients.

1990-48 I.R.B. 10.

Taxpayer identification numbers (TINs).

Backup withholding.

Exceptions

Penalties.

The following is a list of transactions that are not reportable;

Other general topics.

however, you may choose to report them. If you do, you are

subject to the rules in these instructions.

You can get the general instructions at

IRS.gov/

1099generalinstructions

or go to IRS.gov/Form1099S.

1. Sale or exchange of a residence (including stock in a

cooperative housing corporation) for $250,000 or less if you

Specific Instructions

received an acceptable written assurance (certification) from the

seller that such residence is the principal residence (within the

File Form 1099-S, Proceeds From Real Estate Transactions, to

meaning of section 121) of the seller and the full amount of the

report the sale or exchange of real estate.

gain on such sale is excludable from gross income under section

121. If the certification includes an assurance that the seller is

Reportable Real Estate

married, the preceding sentence shall be applied by substituting

Generally, you are required to report a transaction that consists

“$500,000” for “$250,000.” If there are joint sellers, you must

in whole or in part of the sale or exchange for money,

obtain a certification from each seller (whether married or not) or

indebtedness, property, or services of any present or future

file Form 1099-S for any seller who does not make the

ownership interest in any of the following.

certification. The certification must be signed by each seller

under penalties of perjury.

1. Improved or unimproved land, including air space.

A sample certification format can be found in Rev. Proc.

2. Inherently permanent structures, including any

2007-12, 2007-4 I.R.B. 354, available at

IRS.gov/irb/

residential, commercial, or industrial building.

2007-04_IRB/ar09.html.

3. A condominium unit and its appurtenant fixtures and

common elements, including land.

Rev. Proc. 2007-12 does not reflect changes made by P.

L. 110-289, section 3092(a), which added section

4. Stock in a cooperative housing corporation (as defined in

121(b)(5). The sample certification included in Rev.

section 216).

CAUTION

Proc. 2007-12 does not include an assurance that there has

5. Any non-contingent interest in standing timber.

been no period of nonqualified use (as that term is defined in

section 121(b)(5)(C)) after December 31, 2008. Also, the sample

Sale or exchange. A sale or exchange includes any

certification included in Rev. Proc. 2007-12 does not include an

transaction properly treated as a sale or exchange for federal

assurance, as required by section 6045(e)(5)(A)(iii), that the full

income tax purposes, even if the transaction is not currently

amount of the gain from the sale is excludable under section

taxable. For example, a sale of a main home may be a

121.

reportable sale even though the transferor may be entitled to

exclude the gain under section 121. But see Exceptions, later.

Also, a transfer to a corporation that qualifies for nonrecognition

Nov 09, 2017

Cat. No. 27988X

Instructions For Form 1099-S - Proceeds From Real Estate Transactions - 2018

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