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

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

transferor and transferee, the application of the proceeds, and

is considered to be a corporation under Regulations section

the identity of the settlement agent or other person responsible

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

for preparing the form.

government or an international organization; or an exempt

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

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

person responsible for closing the transaction is the person who

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

prepares the closing statement, including a settlement statement

nonexempt transferor.

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

An exempt volume transferor is someone who sold or

transferor and transferee, reasonably identifies the real estate

exchanged during the year, who expects to sell or exchange

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

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

were disbursed.

previous years at least 25 separate items of reportable real

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

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

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

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

the following order:

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

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

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

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

required to report an exempt volume transferor's transactions if

proceeds to the transferor or who prepares or reviews the

you receive the penalties of perjury certification required by

preparation of the documents transferring legal or equitable

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

ownership;

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

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

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

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

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

proceeds to the transferor or who prepares or reviews the

the acquisition of real estate.

preparation of the documents transferring legal or equitable

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

ownership; or

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

c. The disbursing title or escrow company that is most

foreclosure, or an abandonment.

significant in disbursing gross proceeds.

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

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

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

one whose involvement is most significant is the person

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

considered responsible for closing the transaction.

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

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

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

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

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

transfer unless you can determine that the “other valuable

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

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

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

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

For purposes of 2 above, apply the following definitions.

separately to each transferor.

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

No reporting is required for the sale or exchange of an

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

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

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

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

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

An interest in surface or subsurface natural resources (for

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

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

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

whether or not such natural resources or crops are severed from

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

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

is most senior in priority. Amounts advanced by the transferor

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

are not treated as new funds.

Timber, earlier.

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

A burial plot or vault.

the transferor and who is compensated for the transaction.

A manufactured structure used as a dwelling that is

c. Transferee's broker means the broker who significantly

manufactured and assembled at a location different from that

participates in the preparation of the offer to acquire the property

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

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

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

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

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

significantly participates in the preparation of the acquisition

or exchange of reportable real estate.

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

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

Who Must File

broker.

Generally, the person responsible for closing the transaction, as

d. Transferee means the person who acquires the greatest

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

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

responsible for closing the transaction, the person required to

the transferee is the person listed first on the ownership transfer

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

documents.

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

3. Designation agreement. You can enter into a written

agreement, as explained under 3, later.

agreement at or before closing to designate who must file Form

1. If you are the person responsible for closing the

1099-S for the transaction. The agreement will identify the

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

person responsible for filing if such designated person signs the

Statement (HUD-1) prescribed under the Real Estate Settlement

agreement. It is not necessary that all parties to the transaction

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

(or that more than one party) enter into the agreement.

as the settlement agent on the statement, the person

You may be designated in the agreement as the person who

responsible for closing the transaction is the person listed as the

must file if you are the person responsible for closing the

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

transaction (as explained in 1 under Who Must File, earlier), the

amendments, variations, or substitutions that may be prescribed

transferee's or transferor's attorney (as explained in 1 under

under RESPA if any such form requires disclosure of the

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Instructions for Form 1099-S (2015)

Instructions For Form 1099-S - Proceeds From Real Estate Transactions - 2015 Page 2

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