Line by line Form 1099-S Instructions
Form 1099-S is used to report real estate transactions. The person or entity responsible for closing the transaction must file Form 1099-S with the IRS and provide copies to the transfereor by the required deadline. In this guide, we will provide step-by-step instructions on how to complete Form 1099-S.
Table of Contents:
What is Form 1099-S?
Form 1099-S is an IRS tax form known as “Proceeds from Real Estate Transactions,” used to report real estate sales or exchanges. This includes sales or exchange for money, property, indebtedness, service, or ownership interest in any
of the following:
- Improved or unimproved land, including air space.
- Permanent structures including residential, commercial, or industrial buildings.
- Condominium unit, including land.
- Stock in a cooperative housing corporation.
- Non-contingent interest in standing timber.
Generally, Form 1099-S is filed by real estate professionals, settlement agents, closing attorneys, escrow companies, and mortgage lenders. This form is filed with the IRS and furnishes recipient copies to the transferors to report the sale proceeds in their personal income tax returns.
How to Fill Out Form 1099-S?
Form 1099-S consists of six boxes that are used to report specific information. Before filling out Box 1, the filer must provide their basic information, including their legal name, address, and Taxpayer Identification Number (TIN). Additionally, provide the transferor's legal name, address, TIN, and, if applicable, the account number. Let’s have a closer look at the following table that explains the respective boxes of Form 1099-S:
| Box Number | Title | Description |
|---|---|---|
| 1 | Date of Closing | Enter the closing date. On a Closing Disclosure, this corresponds to the "Closing Disclosure date." If a Closing Disclosure is not used, the closing date will be the earlier of the title transfer date or the date when the economic burdens and benefits of ownership shift to the new owner (also known as the transferee). |
| 2 | Gross Proceeds |
Enter the total cash or cash-equivalent amount received, or to be received, by or on behalf of the seller from the sale or exchange of real estate. This includes the principal amount of any note payable to the seller, any mortgages or notes paid off at closing, and any liabilities that the buyer assumes or takes the property subject to, as these are treated as cash. In the case of contingent payment transactions, you must report the maximum determinable proceeds—the highest amount possible if all conditions are met. However, you should not include the value of property or services received in exchange, separately stated payments for personal property (such as appliances or rugs), or deductions for expenses paid by the seller, including sales commissions, deed preparation, advertising, or legal fees. |
| 3 | Address (Including City, State, and ZIP Code) or Legal Description |
Enter the property address (city, state, ZIP). If that isn’t enough to identify it, also enter a legal description, such as a lot or block number. For timber sales, label as "Timber royalties" or for lump-sum timber payments, enter “Lump-sum timber payment.” |
| 4 | Transferor Received or Will Receive Property or Services as Part of the Consideration |
Check this box if the transferor received or will receive non-cash property or services as part of the consideration of the property. |
| 5 | Transferor Is a Foreign Person |
Check this box if the transferor is a foreign person (e.g., nonresident alien, foreign partnership, estate, or trust). Special withholding rules may apply for properties sold by a foreign transferor (see Form 8288). |
| 6 | Buyer's Part of Real Estate Tax |
Enter the portion of real estate taxes paid in advance by the seller that applies to the buyer, often found on the Closing Disclosure. Do not include taxes paid in arrears. |
TaxBandits offers secure and accurate filing of 1099 Forms with the IRS. We also provide solutions for distributing your transferor’s copies. E-file Form 1099-S Now.
When is Form 1099-S due?
For the 2024 tax year, the deadline to file Form 1099-S electronically with the IRS is March 31, 2025. In addition to filing Form 1099-S with the IRS, the recipient copy must be furnished to the transferors. The deadline for distributing recipient copies of Form 1099-S for the 2024 tax year is February 18, 2025.
If you don’t file Form 1099-S within the required deadline, you will be imposed IRS penalties ranging from $60 to $660 per form for the 2024 tax year.
How to File Form 1099-S Electronically?
Once you have all the necessary information, e-filing 1099-S with TaxBandits is simple. Just follow these steps:
- Step 1: Create an account with TaxBandits.
- Step 2: Select or add the business you are filing for.
- Step 3: Enter the required Form 1099-S details.
- Step 4: Review and submit Form 1099-S to the IRS.
Need a recipient copy solution? TaxBandits has you covered! You can select from our postal mail and online
access options.
Get started with TaxBandits today and stay compliant with the IRS!
Helpful Resources
What is Form 1099-S?
Form 1099-S Due Date
Form 1099 Correction
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