Taxes are never a fun subject to talk about, since they’re often unnecessarily complicated and generally end with you having less money in your pocket. To add to the complexity of filing taxes, the IRS requires that you report not only your standard income, but also certain miscellaneous earnings, such as the profit you make if you sell your house.
Yes, if you sell any real property, the IRS will want to know about it through the 1099-S tax form. But there’s good news! If you use a title company to close on your property, they will file the 1099-S form for you. Just don’t forget to tell your accountant that you sold a property come tax season!
That being said, it’s important that you provide the title company with all of the information they need to properly file your 1099-S form, such as your tax ID and social security number. Failure to do so will not only keep the title company from being able to provide the IRS with correct information about the sale of your property—you could be subject to civil or criminal penalties for failure to provide the information.
Your 1099-S amount reported is the gross proceeds of the sale, not your net proceeds. Gross proceeds include cash received, notes payable to the seller, and any liabilities of the seller assumed by the buyer. Gross proceeds don’t include separately stated cash received for personal property.
It should be noted that if the sale is your primary residence, the transaction may not be reportable depending on certain circ*mstances, but always ask your tax professional.
At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.
In case you missed it, check out our last Title Junction post: The Basics of Intellectual Property
FAQs
Form 1099-S is used to report the sale or exchange of present or future interests in real estate. It is generally filed by the person responsible for closing the transaction, but depending on the circ*mstances it might also be filed by the mortgage lender or a broker for one side or other in the transaction.
Is a title company required to issue a 1099-S? ›
We realize 1099 reporting is a thankless burden for all title agencies as most are required to report 1099 information to the IRS as well as furnish copies to sellers. It can be an arduous task that takes employee time, while risking penalties from the IRS if reporting is late or done inaccurately.
Do I need to report Form 1099-S on my tax return? ›
If Form 1099-S was for the sale of business or rental property, then it's reportable on Form 4797 Sales of Business Property and Schedule D. To report real estate for business use, go to our Schedule C - Business Use of Home FAQ.
Do you always get a 1099-S when you sell land? ›
There are a few criteria to keep in mind including the sales price for an individual seller and for a married couple. If the property sales price is in excess of $250,000 for an individual or $500,000 for a married couple, regardless of the amount of gain, the IRS requires the sale to be reported on Form 1099-S.
Who is ultimately responsible for filing a 1099-S after closing? ›
Who is responsible for filing the form? Generally, the person responsible for "closing" a reportable transaction is required to file Form 1099-S.
What do I do if I don't receive a 1099-S? ›
If you have not received an expected 1099 by a few days after that, contact the payer. If you still do not get the form by February 15, call the IRS for help at 1-800- 829-1040. In some cases, you may obtain the information that would be on the 1099 from other sources.
Do I need to do anything with 1099-SA? ›
Do I have to report 1099-SA on my tax return? Yes, you must report it. You report information from Form 1099-SA on either Form 8853 or Form 8889. You'll get IRS Form 1099-SA for each HSA or MSA distribution you made in the current tax year.
What happens if you don't report 1099s? ›
Key Takeaways
Businesses that send you a Form 1099 are also required to send the same information to the IRS. So, if you don't include reportable income on your tax return, the system that matches tax returns to the information in the IRS systems will likely flag your tax return for further evaluation.
Will a 1099-SA affect my tax return? ›
The IRS requires you to prepare Form 8889 and attach it to your tax return when you take a distribution from an HSA. However, if your 1099-SA indicates you did not use the distribution for qualified medical expenses, you will pay income tax on the portion you used for nonqualified expenses.
Is 1099-S included in closing documents? ›
Instead of coming in the mail next January, like most 1099 forms, the 1099-S is usually included in your closing documents. If you didn't get one at closing, you probably will not be getting one. It may be labeled “Substitute form 1099-S”.
Who Doesn't Need to Receive a Form 1099-MISC or 1099-NEC? Generally, C corporations, S Corporations, and LLCs formed as corporations or S Corps don't need to receive a 1099-NEC or 1099-MISC. On irs.gov, check the 1099-NEC instructions and 1099-MISC instructions for exceptions when you are required to issue a 1099.
How does the IRS know if you sold land? ›
Typically, when a taxpayer sells a house (or any other piece of real property), the title company handling the closing generates a Form 1099 setting forth the sales price received for the house. The 1099 is transmitted to the IRS.
Who do 1099s get sent to? ›
What Is the 1099 Form Used for? The 1099 form is used to report non-employment income to the Internal Revenue Service (IRS). Businesses are typically required to issue a 1099 form to a taxpayer (other than a corporation) who has received at least $600 or more in non-employment income during the tax year.
Who is responsible for sending out 1099 forms? ›
The IRS 1099 Forms are a group of tax forms that document payments made by an individual or a business that typically isn't your employer. The business that pays the money fills out the form with the appropriate details and sends copies to you and the IRS. The form reports payments made during the tax year.
Who will send 1099 SA? ›
When it comes time to file your end-of-year income tax return, your HSA provider will send you a 1099-SA listing the amount you spent, so you can include that information with your tax return.
