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

You may get the certification any time on or before January

designate the person required to file Form 1099-S in a written

31 of the year after the year of sale. You may rely on the

agreement, as explained under (3), later.

certification and not file or furnish Form 1099-S unless you know

1. If you are the person responsible for closing the

that any assurance on the certification is incorrect.

transaction, you must file Form 1099-S. If a

Settlement

You must keep the certification for 4 years after the year of

Statement (HUD-1)

prescribed under the Real Estate Settlement

sale. You may keep the certification on paper, microfilm,

Procedures Act of 1974 (RESPA) is used and a person is listed

microfiche, or in an electronic storage system.

as the settlement agent on the statement, the person

responsible for closing the transaction is the person listed as the

You are not required to obtain the certification. However, if

settlement agent on that statement. A HUD-1 includes any

you do not obtain it, you must file and furnish Form 1099-S.

amendments, variations, or substitutions that may be prescribed

2. Any transaction in which the transferor is a corporation (or

under RESPA if any such form requires disclosure of the

is considered to be a corporation under Regulations section

transferor and transferee, the application of the proceeds, and

1.6045-4(d)(2)); a governmental unit, including a foreign

the identity of the settlement agent or other person responsible

government or an international organization; or an exempt

for preparing the form.

volume transferor. Under this rule, if there are exempt and

If a HUD-1 is not used, or no settlement agent is listed, the

nonexempt transferors, you must file Form 1099-S only for the

person responsible for closing the transaction is the person who

nonexempt transferor.

prepares the closing statement, including a settlement statement

An exempt volume transferor is someone who sold or

(including a HUD-1) or other written document that identifies the

exchanged during the year, who expects to sell or exchange

transferor and transferee, reasonably identifies the real estate

during the year, or who sold or exchanged in either of the 2

transferred, and that describes how the proceeds are to be or

previous years at least 25 separate items of reportable real

were disbursed.

estate to at least 25 separate transferees. In addition, each item

If no closing statement is used, or if two or more statements

of reportable real estate must have been held, at the date of

are used, the person responsible for closing the transaction is, in

closing, or will be held, primarily for sale or resale to customers

the following order:

in the ordinary course of a trade or business. You are not

required to report an exempt volume transferor's transactions if

a. The transferee's attorney who is present at the delivery of

you receive the penalties of perjury certification required by

either the transferee's note or a significant part of the cash

Regulations section 1.6045-4(d)(3).

proceeds to the transferor or who prepares or reviews the

preparation of the documents transferring legal or equitable

3. Any transaction that is not a sale or exchange, including a

ownership;

bequest, a gift (including a transaction treated as a gift under

section 1041), and a financing or refinancing that is not related to

b. The transferor's attorney who is present at the delivery of

the acquisition of real estate.

either the transferee's note or a significant part of the cash

proceeds to the transferor or who prepares or reviews the

4. A transfer in full or partial satisfaction of a debt secured by

preparation of the documents transferring legal or equitable

the property. This includes a foreclosure, a transfer in lieu of

ownership; or

foreclosure, or an abandonment.

c. The disbursing title or escrow company that is most

5. A de minimis transfer for less than $600. A transaction is

significant in disbursing gross proceeds.

de minimis if it can be determined with certainty that the total

money, services, and property received or to be received is less

If there is more than one attorney described in (a) or (b), the

than $600, as measured on the closing date. For example, if a

one whose involvement is most significant is the person

contract for sale provides for total consideration of “$1.00 plus

considered responsible for closing the transaction.

other valuable consideration,” the transfer is not a de minimis

2. If no one is responsible for closing the transaction as

transfer unless you can determine that the “other valuable

explained in (1) above, the person responsible for filing is, in the

consideration” is less than $599, as measured on the closing

following order: (a) the mortgage lender, (b) the transferor's

date. The $600 rule applies to the transaction as a whole, not

broker, (c) the transferee's broker, or (d) the transferee.

separately to each transferor.

For purposes of (2) above, apply the following definitions.

No reporting is required for the sale or exchange of an

a. Mortgage lender means a person who lends new funds in

interest in the following types of property, provided the sale is

connection with the transaction, but only if the loan is at least

not related to the sale or exchange of reportable real estate.

partially secured by the real estate. If there is more than one

An interest in surface or subsurface natural resources (for

lender, the one who lends the most new funds is the mortgage

example, water, ores, or other natural deposits) or crops,

lender. If several lenders advance equal amounts of new funds,

whether or not such natural resources or crops are severed from

and no other person advances a greater amount of new funds,

the land. For this purpose, the terms "natural resources" and

the mortgage lender is the one who has the security interest that

"crops" do not include standing timber. For timber royalties, see

is most senior in priority. Amounts advanced by the transferor

Timber, earlier.

are not treated as new funds.

A burial plot or vault.

b. Transferor's broker means the broker who contracts with

A manufactured structure used as a dwelling that is

the transferor and who is compensated for the transaction.

manufactured and assembled at a location different from that

where it is used, but only if such structure is not affixed, on the

c. Transferee's broker means the broker who significantly

closing date, to a foundation. This exception applies to the

participates in the preparation of the offer to acquire the property

transfer of an unaffixed mobile home that is unrelated to the sale

or who presents such offer to the transferor. If there is more than

or exchange of reportable real estate.

one such person, the transferee's broker is the one who most

significantly participates in the preparation of the acquisition

Who Must File

offer. If there is no such person, the one who most significantly

participates in the presentation of the offer is the transferee's

Generally, the person responsible for closing the transaction, as

broker.

explained in (1) below, is required to file Form 1099-S. If no one

is responsible for closing the transaction, the person required to

d. Transferee means the person who acquires the greatest

file Form 1099-S is explained in (2), later. However, you may

interest in the property. If no one acquires the greatest interest,

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Instructions for Form 1099-S (2018)

Instructions For Form 1099-S - Proceeds From Real Estate Transactions - 2018 Page 2

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