Form 1099-S: What’s New, What’s Old
Form 1099-S: Real Estate Settlement
A new checkbox has been added as box 5 to report the transfer of real estate by a foreign person. The previous box 5, Buyer’s Part of Real Estate Tax, is now box 6.
The due dates have also changed. Now, let’s take a closer look at Form 1099-S.
Who files the Form 1099-S?
The person responsible for closing the transaction must file Form 1099-S. If a Settlement Statement (HUD-1) prescribed under the Real Estate Settlement Procedures Act of 1974 (RESPA) is used and a person is listed as the settlement agent on the statement, the person responsible for closing the transaction is the person listed as the settlement agent on that statement.
If HUD-1 is not used, or no settlement agent is listed, the person responsible for closing the transaction is the person who prepares the closing statement, including a settlement statement (including HUD-1) or other written document that identifies the transferor and transferee, reasonably identifies the real estate transferred, and that describes how the proceeds are to be or were disbursed.
If no closing statement is used, or if two or more statements are used, the person responsible for closing the transaction is, in the following order:
The transferee’s attorney who is present at the delivery of either the transferee’s note or a significant part of the cash proceeds to the transferor or who prepares or reviews the preparation of the documents transferring legal or equitable ownership;
The transferor’s attorney who is present at the delivery of either the transferee’s note or a significant part of the cash proceeds to the transferor or who prepares or reviews the preparation of the documents transferring legal or equitable ownership; or
The disbursing title or escrow company that is most significant in disbursing gross proceeds.
If there is more than one attorney described in (a) or (b), the one whose involvement is most significant is the person considered responsible for closing the transaction.
If no one is responsible for closing the transaction as explained in (1) above, the person responsible for filing is, in the following order: (a) the mortgage lender, (b) the transferor’s broker, (c) the transferee’s broker, or (d) the transferee.
What is the purpose of the Form 1099-S?
The purpose of the Form 1099-S is to report a transaction that consists in whole or in part of the sale or exchange for money, indebtedness, property, or services of any present or future ownership interest in any of the following:
- Improved or unimproved land, including air space.
- Inherently permanent structures, including any residential, commercial, or industrial building.
- A condominium unit and its appurtenant fixtures and common elements, including land.
- Stock in a cooperative housing corporation (as defined in section 216).
- Any non-contingent interest in standing timber.
When is the Form 1099-S due?
The filer must submit Copy A of this form to the IRS by February 28th, 2017. If the form is filed electronically, the due date is March 31st, 2017.
The filer must furnish Copy B of Form 1099-S to the transferor by February 15th, 2017.
What information should be provided?
The filer must provide the following information: filer’s name, street address, city or town, state or province, country, ZIP or foreign postal code, telephone number, federal identification number; the transferor’s name, street address (including apt. no.), city or town, state or province, country, ZIP or foreign postal code, account or escrow number; date of closing, gross proceeds, address or legal description (including city, state, and ZIP code), and buyer’s part of real estate tax.
Please read carefully the IRS Instructions for Form 1099-S before you fill it in. You can find the instructions here.
Where do I send Form 1099-S?
Copy A of paper Form 1099-S must be filed with one of the two Internal Revenue Service Centers depending on where your principal business is located or where you reside.