Page 5 - Seller Resource Guide

In general, information required by the I.R.S. falls into the WHAT HAPPENS IF THE SELLER(S) REFUSES TO PROVIDE THE
following categories: TAXPAYER IDENTIFICATION NUMBER FOR THE FORM 1 099S?
The settlement agent is required to request the transferor’s
1. The name, address and taxpayer ID number taxpayer identification number(s) (TIN(s) before the time
(social security or tax identification number, often of closing. You may request a TIN on Form W-9 or use an
called the (“TIN”) of the seller(s)) alternative written request. The I.R.S. has includ ed sample
wording of an alternative written request in the instructions
2. A general description of the property for preparation of Form 1099-S.
(in most cases an address)
Should the seller fail to provide the identification number and
3. The closing date of the transaction certify its correctness, the settlement agent may choose to:

4. The gross proceeds of the transaction (even though gross 1. Delay the closing of the transactions until the
proceeds do not correspond to taxable income) informa tion is furnished, or

5. Any property involved as part of the transaction other than 2. Complete the transaction and report to the I.R.S..
cash or cash equivalent that an attempt was made to obtain the information
from the seller.
6. The name, address and taxpayer identification number of
the settlement agent HOW IS THE SALE REPORTED WHEN THERE IS MORE THAN
ONE SELLER INVOLVED OR WHEN MULTIPLE SELLERS DO
7. Real estate tax paid in advance that is allocable to the buyer. NOT OWN EQUAL INTERESTS IN THE PROPERTY?
Multiple sellers may allocate the gross proceeds among
ON WHAT TYPE OF TRANSACTIONS IS themselves for purposes of reporting. If there is no allocation,
A FORM 1099-S REQUIRED? an incomplete allocation or conflicting alloca tions, then the
Currently, typical homeowner transactions covered include entire gross proceeds will be reported for each seller.
sales and exchanges of 1-4 family residential properties such
as houses and condominiums. Also reportable are sales or WHERE CAN I GO FOR FURTHER INFORMATION ON
exchanges of improved or unim proved land, commercial or TAXATION OF REAL PROPERTY?
industrial buildings, condo miniums, stock in a cooperative The I.R.S.. provides free publications that explain the tax
housing corporation and mobile homes (manufactured homes) aspects of real estate transactions. You may wish to order:
affixed to real property.
• Publication #523: Selling Your Home
Specifically excluded from reporting are (a) foreclosures
(b) abandonments of real property and (c) financings or • Publication #530: Tax Information for
refinancings of properties. Additionally, a 1099-S is not required First-Time Homeowners
for the sale or exchange of a principal residence with gross
proceeds of $250,000 or less ($500,000 or less for married • Publication #544: Sales and Other Dispositions of Assets
filing jointly) if an accept able written assurance (certification)
from the seller is obtained that indicates the full gain is • Publication #551: Basis of Assets
excludable from the seller’s gross income.