Everything you need to know about Form 1099-S

What is Form 1099-S?

Form 1099-S, Proceeds From Real Estate Transactions, is the information return that reports gross proceeds from the sale or exchange of real estate. The "reporting person" — typically the closing or settlement agent (title company, escrow company, or attorney handling the closing) — issues Form 1099-S to the seller and files Copy A with the IRS. The form reports the date of closing, gross proceeds, property address or legal description, and whether any property tax was allocated to the buyer at closing. It applies to residential and commercial property, vacant land, condos, co-op apartments, timeshares, and most other interests in real estate.

Who issues Form 1099-S and who gets one

The "reporting person" for a real estate transaction is, in order of preference: the person responsible for closing the transaction (typically the settlement agent or escrow company), the mortgage lender, the seller's broker, the buyer's broker, or the buyer if no one else fits. Recipients are sellers (transferors) of real estate. The seller can sometimes avoid 1099-S issuance for a principal residence sale that qualifies for the full Section 121 exclusion by providing a written certification of nonrecognition to the closing agent at closing — most closing agents have a standard form for this.

How sellers use Form 1099-S?

The seller reports the sale on Form 8949 (Sales and Other Dispositions of Capital Assets) and Schedule D of Form 1040 — even if no tax is owed because of the Section 121 home sale exclusion ($250,000 for single, $500,000 for married filing jointly). The amount in Box 2 of Form 1099-S goes in the Proceeds column of Form 8949; the seller's cost basis (purchase price plus capital improvements minus depreciation) goes in the Cost Basis column. The difference is the capital gain or loss, with primary-residence exclusion applied where it qualifies. Real estate held for investment or rental follows the same flow but without the Section 121 exclusion.

When and how to file?

The reporting person must furnish Copy B to the transferor (seller) by February 15. Copy A is filed with the IRS by February 28 on paper or March 31 electronically. Filers issuing 10 or more information returns of any type must e-file. Note that the recipient deadline is later than most other 1099 forms (February 15 vs. January 31), reflecting the typical timing of closing paperwork.