1099-S, which is Internal Revenue Service speak for the proceeds from real state transactions, is a fairly common 1099. Simply put, it is used for real estate transactions. However, this is a very simple explanation and as we know, the IRS is never that simple. So in this post I am going to explain what a 1099-S is, who gets one, when and where to file the form, and what information is needed to fill it out. Also if you’re potentially looking for information on any of the other 19 types of 1099’s I would like to redirect you to my summary of the 20 types of 1099’s. But anyways, with out further ado, lets get into Form 1099-S.
So what is Form 1099-S?
The simple explanation as I stated above, is that a 1099-S is the proceeds from real estate transactions. However, a more in depth explanation would be that a 1099-S is a tax document that ensures the correct amount of proceeds is recognized for any real estate sale. This document must be filled out by the buyer. This is usually done as part of the closing documents. This form will ask for a lot information in order to ensure everything about the sale was done correctly.
What information is required in Form 1099-S?
Well, for a 50,000 foot view, this form contains information about the buyer, the transferor (seller), the date of closing, details of the property and of course, proceeds. In order to complete the form, the following information needs to be provided:
- Buyer’s name, address and telephone number
- Seller’s name, address and telephone number
- Buyer’s Social Security or Tax Identification Number
- Seller’s Social Security or Tax Identification Number
- Gross Proceeds from sale
- Account or Escrow number
- Date of closing
- Buyer’s share of real estate tax
Also two additional boxes that must be checked (or not checked) if the transferor (seller or sellers) will receive property as consideration, or if they are a foreign person (s)/entities.
So who gets a 1099-S?
Well there are three places that these forms should go to. These are the buyer, the seller, and obviously the IRS. Like I stated above however, these forms should only be filled out once the sale has actually closed. And they should realistically be done during the closing process.
When and where should I file my Form 1099-S?
The due date for form 1099-S to be sent to the recipient (seller or sellers), is February 1st. For 2020 taxes this would be February 1st 2021. The due date for IRS paper filing March 15th 2021. And the due date for E-filing is March 31st 2021, for the 2020 tax year. As where to file your 1099-S is concerned, firstly a copy goes to the recipient (seller or sellers), and the paper IRS copy will go to the same IRS processing center where other 1099’s will go to, for processing. And obviously E-Filing can be done online.
Conclusion
In conclusion Form 1099-S is very straightforward. Essentially, the IRS just wants to know who was involved in a certain real estate deal and what that deal was. Most of the information on this form is very basic and could be found relatively easily. In fact, most of the time these forms are filled out for the buyer via the closing process. However a licensed CPA can be a valuable resource for anyone with a question about this form.