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

2017

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

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

otherwise noted.

the parties enter into the contract.

Future Developments

Ownership interest. An ownership interest includes fee simple

interests, life estates, reversions, remainders, and perpetual

For the latest information about developments related to Form

easements. It also includes any previously created rights to

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

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

they were published, go to

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

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

What’s New

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

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

Foreign Transferors. A new checkbox has been added as

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

box 5 to report the transfer of real estate by a foreign person.

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

Previous box 5, Buyer's Part of Real Estate Tax, is now box 6.

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

Reminder

ownership interest does not include any option to acquire real

estate. An ownership interest also includes any contractual

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

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

2017

General Instructions for Certain Information

Returns.

payment that is fixed and not contingent.

Those general instructions include information about the

following topics.

Involuntary conversion. A sale of real estate under threat or

Who must file (nominee/middleman).

imminence of seizure, requisition, or condemnation is generally

When and where to file.

a reportable transaction.

Electronic reporting requirements.

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

Corrected and void returns.

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

Statements to recipients.

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

Taxpayer identification numbers.

1990-48 I.R.B. 10.

Backup withholding.

Penalties.

Exceptions

Other general topics.

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

You can get the general instructions from

General

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

Instructions for Certain Information Returns

subject to the rules in these instructions.

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

1. Improved or unimproved land, including air space.

under penalties of perjury.

2. Inherently permanent structures, including any

A sample certification format can be found in Revenue

residential, commercial, or industrial building.

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

irb/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

Public Law 110-289, section 3092(a), which added

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

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

section 216).

CAUTION

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

5. Any non-contingent interest in standing timber.

has 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.

You may get the certification any time on or before January

Also, a transfer to a corporation that qualifies for nonrecognition

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

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

Nov 15, 2016

Cat. No. 27988X

Instructions For Form 1099-S - Proceeds From Real Estate Transactions - 2017

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