Form 1099-S Instructions for 2026

Before you start: what you will need

Form 1099-S reports four categories of information: who is filing, who transferred the property, what property was transferred, and what the transferor received for it. Every box on the form supports one of these four categories.

Have the following ready before filing:

• Filer’s name, address, telephone number, and TIN
• Transferor’s name, address, TIN, and account number, if one is assigned
• The closing date and property address or legal description
• Total gross proceeds, split between cash and digital assets
• The buyer’s share of any real estate tax paid in advance
• Whether the transferor received property or services as part of the price, and whether the transferor is a foreign person
• For digital asset payments, the asset’s DTIF code, name, number of units, and date received
• Any allocation of proceeds among multiple transferors

What changed in the Form 1099-S instructions for 2026

• Digital assets are now reported. Beginning in tax year 2026, digital assets used to pay for real estate are reported on Form 1099-S.
• Box 2 is now three boxes. Gross proceeds, previously one figure, are now reported as total gross proceeds (2a), cash gross proceeds (2b), and digital asset gross proceeds (2c). Box 2a equals 2b plus 2c.
• New Boxes 8a to 8d identify the digital asset. These boxes report the asset’s DTIF code, name, number of units, and the date it was received.
• The FIRE system retires at the end of 2026. Starting with tax year 2026 returns, IRIS is the only IRS intake system for information returns. Filers still using FIRE should complete the move to IRIS before the 2027 filing season. Learn More

Form 1099-S box-by-box instructions

• Box 1, Date of closing

  Enter the closing date. When a Closing Disclosure is used, the closing date is the Closing Disclosure date. Otherwise, it is the earlier of the date title transfers or the date the burdens and benefits of ownership shift to the buyer.

• Box 2a, Total gross proceeds

  Enter the total gross proceeds, generally the sales price. Box 2a must equal the total of Boxes 2b and 2c. Do not reduce it by the seller’s expenses, such as commissions, legal fees, or advertising. Box 2 is covered in more detail in the gross proceeds section below.

• Box 2b, Cash gross proceeds

  New for 2026. Enter cash and items treated as cash. These include notes payable to the seller, mortgages paid off at settlement, and liabilities the buyer assumes. Cash received through a digital asset payment processor counts as cash.

• Box 2c, Digital asset gross proceeds

  New for 2026. Enter the fair market value, in U.S. dollars, of digital assets the seller received or will receive. Report this only when you know or would ordinarily know the seller received digital assets. You are treated as knowing when the sale contract provides for payment in digital assets.

• Box 3, Address or legal description

  Enter the property address, including city, state, and ZIP code. If the address does not identify the property clearly, add a legal description, such as section, lot, and block. For timber, enter Timber royalties or Lump-sum timber payment.

• Box 4, Buyer’s part of real estate tax

  For the sale of a residence, enter real estate tax paid in advance that is allocable to the buyer. Taxes paid in arrears are not reported. You may use the figures on the Closing Disclosure.

  For example, the seller prepaid $1,200 of annual real estate tax, and the sale closes at the end of the ninth month of the tax year. The buyer’s share is $300, reported in Box 4.

• Box 5, Reserved

  It is reserved for future use.

• Box 6, Property or services received

  Check this box if the seller received or will receive property or services, other than cash, notes, or digital assets, as part of the price. Their value is not included in Boxes 2a, 2b, or 2c. For a like-kind exchange with no reportable gross proceeds, enter zero in Box 2a and check Box 6.

• Box 7, Foreign person

  Check this box if the seller is a nonresident alien, foreign partnership, foreign estate, or foreign trust. Foreign transferors are always reportable. The buyer may also have withholding obligations under FIRPTA, reported on Form 8288.

• Box 8a, Digital asset code

  New for 2026. Enter the nine-character digital token identifier issued by the Digital Token Identifier Foundation (DTIF). If the asset is not registered with DTIF, enter 999999999.

• Box 8b, Digital asset name

  New for 2026. Enter the full name of the digital asset. If you entered a DTIF code in Box 8a, use the name that matches that registration.

• Box 8c, Number of digital asset units

  New for 2026. Enter the number of units the seller received or will receive, to 18 decimal places.

• Box 8d, Date digital asset received

  New for 2026. Enter the date the seller received or will receive the digital asset, in MM/DD/YYYY format. Leave it blank if the assets were received on various dates.

Form 1099-S Box 2 instructions: gross proceeds explained

Box 2 is the figure the seller uses to report the sale, and for 2026 it is split into three boxes. Getting the split right depends on sorting each part of the consideration into the correct category.

A worked example

A home sells for $500,000. The buyer pays $400,000 in cash and $100,000 worth of a digital asset at closing.

• Box 2b: $400,000
• Box 2c: $100,000
• Box 2a: $500,000
• Boxes 8a to 8d: the digital asset’s DTIF code, name, units, and date received

None of these figures is reduced by the seller’s commissions or closing costs.

Common Form 1099-S filing mistakes

• Using the old box numbers. On the 2026 form, buyer’s real estate tax is Box 4, the property or services checkbox is Box 6, and the foreign person checkbox is Box 7. Box 5 is reserved.
• Reporting only Box 2a. Box 2a must equal Box 2b plus Box 2c. On a cash sale, the same amount belongs in both Box 2a and Box 2b.
• Reducing gross proceeds by selling expenses. Commissions, legal fees, and other seller costs are never subtracted from gross proceeds.
• Including personal property in gross proceeds. Separately stated cash for items like appliances or furniture is not included.
• Filing more than one form per transferor. Only one person files, and each transferor receives only one Form 1099-S for the transaction.
• Relying on an incomplete residence certification. The principal residence exception requires a signed certification from every seller, including the assurances about nonqualified use and full gain exclusion.
• Charging a separate fee for Form 1099-S. The cost may be built into your overall closing fees, but not charged on its own.

Filing your 1099-S once it is complete

Once all applicable boxes are completed, Form 1099-S can be filed by paper or electronically. With the FIRE system retiring at the end of 2026, e-filing is the more sustainable option regardless of current filing volume.

To e-file with TaxBandits:

• Step 1: Create a free account.
• Step 2: Select or add the business filing the return.
• Step 3: Enter the required Form 1099-S details, following the box-by-box instructions above.
• Step 4: Review all entries, then transmit to the IRS.

E-File Form 1099-S Now, starting as low as $0.80/form.

Frequently asked questions