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

2015

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

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

otherwise noted.

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

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

Future Developments

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

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

For the latest information about developments related to Form

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

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

ownership interest does not include any option to acquire real

they were published, go to

estate. An ownership interest also includes any contractual

Reminder

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

payment that is fixed and not contingent.

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

2015 General Instructions for Certain Information Returns.

Involuntary conversion. A sale of real estate under threat or

Those general instructions include information about the

imminence of seizure, requisition, or condemnation is generally

following topics.

a reportable transaction.

Who must file (nominee/middleman).

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

When and where to file.

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

Electronic reporting requirements.

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

Corrected and void returns.

1990-48 I.R.B. 10.

Statements to recipients.

Taxpayer identification numbers.

Exceptions

Backup withholding.

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

Penalties.

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

Other general topics.

subject to the rules in these instructions.

You can get the general instructions from

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

form1099s

or by calling 1-800-TAX-FORM (1-800-829-3676).

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

received an acceptable written assurance (certification) from the

Specific Instructions

seller that such residence is the principal residence (within the

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

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

gain on such sale is excludable from gross income under section

report the sale or exchange of real estate.

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

married, the preceding sentence shall be applied by substituting

Reportable Real Estate

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

Generally, you are required to report a transaction that consists

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

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

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

indebtedness, property, or services of any present or future

certification. The certification must be signed by each seller

ownership interest in any of the following:

under penalties of perjury.

1. Improved or unimproved land, including air space;

A sample certification format can be found in Revenue

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

2. Inherently permanent structures, including any

irb/2007-04_IRB/ar09.html.

residential, commercial, or industrial building;

3. A condominium unit and its appurtenant fixtures and

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

common elements, including land;

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

section 121(b)(4 [sic (5)]). The sample certification

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

CAUTION

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

section 216); and

that there has been no period of nonqualified use (as that term is

5. Any non-contingent interest in standing timber.

defined in section 121(b)(4 [sic (5)])(C)) after December 31,

2008. Also, the sample certification included in Rev. Proc.

Sale or exchange. A sale or exchange includes any

2007-12 does not include an assurance, as required by section

transaction properly treated as a sale or exchange for federal

6045(e)(5)(A)(iii), that the full amount of the gain from the sale is

income tax purposes, even if the transaction is not currently

excludable under section 121.

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

reportable sale even though the transferor may be entitled to

You may get the certification any time on or before January

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

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

Also, a transfer to a corporation that qualifies for nonrecognition

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

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

that any assurance on the certification is incorrect.

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

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

the parties enter into the contract.

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

Ownership interest. An ownership interest includes fee simple

microfiche, or in an electronic storage system.

interests, life estates, reversions, remainders, and perpetual

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

easements. It also includes any previously created rights to

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

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

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

Nov 03, 2014

Cat. No. 27988X

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

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