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Department of the Treasury
Internal Revenue Service
2021

Instructions for Form 1099-S

Proceeds From Real Estate Transactions

Section references are to the Internal Revenue Code unless transfer under a land contract is reportable in the year in which
otherwise noted. the parties enter into the contract.
Ownership interest. An ownership interest includes fee simple
Future Developments interests, life estates, reversions, remainders, and perpetual
For the latest information about developments related to Form easements. It also includes any previously created rights to
1099-S and its instructions, such as legislation enacted after possession or use for all or part of any particular year (for
they were published, go to IRS.gov/Form1099S. example, a leasehold, easement, or timeshare), if such rights
have a remaining term of at least 30 years, including any period
Reminders for which the holder may renew such rights, determined on the
In addition to these specific instructions, you should also use the date of closing. For example, a preexisting leasehold on a
2021 General Instructions for Certain Information Returns. building with an original term of 99 years and a remaining term of
Those general instructions include information about the 35 years on the closing date is an ownership interest; however, if
following topics. the remaining term is 10 years, it is not an ownership interest. An
• Who must file. ownership interest does not include any option to acquire real
• When and where to file. estate. An ownership interest also includes any contractual
• Electronic reporting. interest in a sale or exchange of standing timber for a lump-sum
• Corrected and void returns. payment that is fixed and not contingent.
• Statements to recipients.
• Taxpayer identification numbers (TINs). Involuntary conversion. A sale of real estate under threat or
• Backup withholding. imminence of seizure, requisition, or condemnation is generally
• Penalties. a reportable transaction.
• Other general topics. Timber. Report on Form 1099-S payments of timber royalties
made under a pay-as-cut contract, reportable under section
You can get the general instructions at IRS.gov/ 6050N. For more information, see Announcement 90-129,
1099GeneralInstructions or go to IRS.gov/Form1099S. 1990-48 I.R.B. 10.
Online PDF fillable Copies B and C. To ease statement
furnishing requirements, Copies B and C are fillable online in a Exceptions
PDF format available at IRS.gov/Form1099S. You can complete The following is a list of transactions that are not reportable;
these copies online for furnishing statements to recipients and however, you may choose to report them. If you do, you are
for retaining in your own files. subject to the rules in these instructions.
1. Sale or exchange of a residence (including stock in a
Specific Instructions cooperative housing corporation) for $250,000 or less if you
File Form 1099-S, Proceeds From Real Estate Transactions, to received an acceptable written assurance (certification) from the
report the sale or exchange of real estate. seller that such residence is the principal residence (within the
meaning of section 121) of the seller and the full amount of the
Reportable Real Estate gain on such sale is excludable from gross income under section
121. If the certification includes an assurance that the seller is
Generally, you are required to report a transaction that consists married, the preceding sentence shall be applied by substituting
in whole or in part of the sale or exchange for money, “$500,000” for “$250,000.” If there are joint sellers, you must
indebtedness, property, or services of any present or future obtain a certification from each seller (whether married or not) or
ownership interest in any of the following. file Form 1099-S for any seller who does not make the
1. Improved or unimproved land, including air space. certification. Also, the seller must include in the certification that
2. Inherently permanent structures, including any there has been no period of nonqualified use (as that term is
residential, commercial, or industrial building. defined in section 121(b)(5)(C)) after December 31, 2008, and
3. A condominium unit and its appurtenant fixtures and as required by section 6045(e)(5)(A)(iii), that the full amount of
common elements, including land. the gain from the sale is excludable under section 121. The
certification must be signed by each seller under penalties of
4. Stock in a cooperative housing corporation (as defined in perjury.
section 216).
A sample certification format can be found in Rev. Proc.
5. Any non-contingent interest in standing timber. 2007-12, 2007-4 I.R.B. 354, available at IRS.gov/irb/
2007-04_IRB#RP-2007-12.html. The sample certification does
Sale or exchange. A sale or exchange includes any not include an assurance that there has been no period of
transaction properly treated as a sale or exchange for federal nonqualified use and an assurance that the full amount of the
income tax purposes, even if the transaction is not currently gain from the sale is excludable under section 121. The seller
taxable. For example, a sale of a main home may be a must add the information as explained earlier.
reportable sale even though the transferor may be entitled to
exclude the gain under section 121. But see Exceptions, later. You may get the certification any time on or before January
Also, a transfer to a corporation that qualifies for nonrecognition 31 of the year after the year of sale. You may rely on the
of gain under section 351 is a reportable exchange. In addition, a certification and not file or furnish Form 1099-S unless you know
that any assurance on the certification is incorrect.

Nov 04, 2020 Cat. No. 27988X

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You must keep the certification for 4 years after the year of Consumer Protection Act (Dodd-Frank) is used and a person is
sale. You may keep the certification on paper, microfilm, listed as the settlement agent on the Closing Disclosure, the
microfiche, or in an electronic storage system. person responsible for closing the transaction is the person
You are not required to obtain the certification. However, if listed as the settlement agent on that Closing Disclosure. The
you do not obtain it, you must file and furnish Form 1099-S. Closing Disclosure combines and replaces the HUD-1
Settlement Statement and the final Truth-in-Lending (TIL)
2. Any transaction in which the transferor is a corporation (or statement under the Real Estate Settlement Procedures Act
is considered to be a corporation under Regulations section (RESPA) of 1974, as amended, and the Federal Truth in
1.6045-4(d)(2)); a governmental unit, including a foreign Lending Act, which is contained in title I of the Consumer Credit
government or an international organization; or an exempt Protection Act, as amended (15 U.S.C. 1601). The form
volume transferor. Under this rule, if there are exempt and incorporates the information provided on the Loan Estimate. A
nonexempt transferors, you must file Form 1099-S only for the Closing Disclosure includes any amendments, variations, or
nonexempt transferor. substitutions that may be prescribed under Dodd-Frank if any
An exempt volume transferor is someone who sold or such form discloses the transferor and transferee, the
exchanged during the year, who expects to sell or exchange application of the proceeds, and the identity of the settlement
during the year, or who sold or exchanged in either of the 2 agent or other person responsible for preparing the form.
previous years at least 25 separate items of reportable real If the Closing Disclosure is not used, or no settlement agent is
estate to at least 25 separate transferees. In addition, each item listed, the person responsible for closing the transaction is the
of reportable real estate must have been held, at the date of person who prepares a Closing Disclosure that identifies the
closing, or will be held, primarily for sale or resale to customers transferor and transferee, reasonably identifies the real estate
in the ordinary course of a trade or business. You are not transferred, and describes how the proceeds are to be or were
required to report an exempt volume transferor's transactions if disbursed.
you receive the penalties of perjury certification required by
Regulations section 1.6045-4(d)(3). If no Closing Disclosure is used, or if two or more Closing
Disclosures are used, the person responsible for closing the
3. Any transaction that is not a sale or exchange, including a transaction is, in the following order:
bequest, a gift (including a transaction treated as a gift under
section 1041), and a financing or refinancing that is not related to a. The transferee's attorney who is present at the delivery of
the acquisition of real estate. either the transferee's note or a significant part of the cash
proceeds to the transferor or who prepares or reviews the
4. A transfer in full or partial satisfaction of a debt secured by preparation of the documents transferring legal or equitable
the property. This includes a foreclosure, a transfer in lieu of ownership,
foreclosure, or an abandonment.
b. The transferor's attorney who is present at the delivery of
5. A de minimis transfer for less than $600. A transaction is either the transferee's note or a significant part of the cash
de minimis if it can be determined with certainty that the total proceeds to the transferor or who prepares or reviews the
money, services, and property received or to be received is less preparation of the documents transferring legal or equitable
than $600, as measured on the closing date. For example, if a ownership, or
contract for sale provides for total consideration of “$1.00 plus
other valuable consideration,” the transfer is not a de minimis c. The disbursing title or escrow company that is most
transfer unless you can determine that the “other valuable significant in disbursing gross proceeds.
consideration” is less than $599, as measured on the closing If there is more than one attorney described in (a) or (b), the
date. The $600 rule applies to the transaction as a whole, not one whose involvement is most significant is the person
separately to each transferor. considered responsible for closing the transaction.
No reporting is required for the sale or exchange of an 2. If no one is responsible for closing the transaction as
interest in the following types of property, provided the sale is explained in (1) above, the person responsible for filing is, in the
not related to the sale or exchange of reportable real estate. following order: (a) the mortgage lender, (b) the transferor's
• An interest in surface or subsurface natural resources (for broker, (c) the transferee's broker, or (d) the transferee.
example, water, ores, or other natural deposits) or crops, For purposes of (2) above, apply the following definitions.
whether or not such natural resources or crops are severed from
the land. For this purpose, the terms "natural resources" and a. Mortgage lender means a person who lends new funds in
"crops" do not include standing timber. For timber royalties, see connection with the transaction, but only if the loan is at least
Timber, earlier. partially secured by the real estate. If there is more than one
• A burial plot or vault. lender, the one who lends the most new funds is the mortgage
• A manufactured structure used as a dwelling that is lender. If several lenders advance equal amounts of new funds,
manufactured and assembled at a location different from that and no other person advances a greater amount of new funds,
where it is used, but only if such structure is not affixed, on the the mortgage lender is the one who has the security interest that
closing date, to a foundation. This exception applies to the is most senior in priority. Amounts advanced by the transferor
transfer of an unaffixed mobile home that is unrelated to the sale are not treated as new funds.
or exchange of reportable real estate. b. Transferor's broker means the broker who contracts with
the transferor and who is compensated for the transaction.
Who Must File c. Transferee's broker means the broker who significantly
Generally, the person responsible for closing the transaction, as participates in the preparation of the offer to acquire the property
explained in (1) below, is required to file Form 1099-S. If no one or who presents such offer to the transferor. If there is more than
is responsible for closing the transaction, the person required to one such person, the transferee's broker is the one who most
file Form 1099-S is explained in (2), later. However, you may significantly participates in the preparation of the acquisition
designate the person required to file Form 1099-S in a written offer. If there is no such person, the one who most significantly
agreement, as explained under (3), later. participates in the presentation of the offer is the transferee's
1. If you are the person responsible for closing the broker.
transaction, you must file Form 1099-S. If a Closing Disclosure d. Transferee means the person who acquires the greatest
prescribed under the Dodd-Frank Wall Street Reform and interest in the property. If no one acquires the greatest interest,

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the transferee is the person listed first on the ownership transfer an allocation received on or after the due date of Form 1099-S
documents. (without extensions).
3. Designation agreement. You can enter into a written
agreement at or before closing to designate who must file Form If no gross proceeds are allocated to a transferor because no
1099-S for the transaction. The agreement will identify the allocation or an incomplete allocation is received, you must
person responsible for filing if such designated person signs the report the total unallocated gross proceeds on the Form 1099-S
agreement. It is not necessary that all parties to the transaction made for that transferor. If you do not receive any allocation or
(or that more than one party) enter into the agreement. you receive conflicting allocations, report on each transferor's
Form 1099-S the total unallocated gross proceeds.
You may be designated in the agreement as the person who
must file if you are the person responsible for closing the Spouses. If the transferors were spouses at the time of closing,
transaction (as explained in (1) under Who Must File, earlier), who held the property as joint tenants, tenants by the entirety,
the transferee's or transferor's attorney (as explained in (1) tenants in common, or as community property, treat them as a
under Who Must File, earlier), the title or escrow company that is single transferor. Only one Form 1099-S showing either of them
most significant in disbursing gross proceeds, or the mortgage as the transferor is required. You need not request an allocation
lender (as explained in (2a) under Who Must File, earlier). of gross proceeds if spouses are the only transferors. But if you
receive an uncontested allocation of gross proceeds from them,
The designation agreement may be in any written form and
file Form 1099-S for each spouse according to the allocation. If
may be included on the Closing Disclosure. It must:
there are other transferors, you must make a reasonable effort to
a. Identify by name and address the person designated as contact either spouse to request an allocation.
responsible for filing,
Partnerships. If the property is transferred by a partnership, file
b. Include the names and addresses of each person only one Form 1099-S for the partnership, not separate Forms
entering into the agreement, 1099-S for each partner.
c. Be signed and dated by all persons entering into the
agreement, Multiple Assets Sold
d. Include the names and addresses of the transferor and If real estate is sold or exchanged and other assets are sold or
transferee, and exchanged in the same transaction, report the total gross
e. Include the address and any other information necessary proceeds from the entire transaction on Form 1099-S.
to identify the property.
TINs
Each person who signs the agreement must keep it for 4 years. You must request the transferor's TIN no later than the time of
For each transaction, be sure that only one person is closing. The TIN request need not be made in a separate
TIP responsible for filing and that only one Form 1099-S is mailing. Rather, it may be made in person, in a mailing that
filed for each transferor. includes other items, or electronically. The transferor is required
to furnish his or her complete, non-truncated TIN and to certify
that the TIN is correct. For U.S. persons (including U.S. resident
Employees, Agents, and Partners aliens), you may request a TIN on Form W-9, Request for
If an employee, agent, or partner, acting within the scope of such Taxpayer Identification Number and Certification. Foreign
person's employment, agency, or partnership, participates in a persons may provide their TIN to you on the appropriate Form
real estate transaction, only the employer, principal, or W-8. See part J in the 2021 General Instructions for Certain
partnership (not the employee, agent, or partner) may be the Information Returns.
reporting person. However, the participation of a person listed
on the Closing Disclosure as the settlement agent acting as an Alternatively, you may provide a written statement to the
agent of another is not attributed to the principal. transferor similar to the following: “You are required by law to
provide (insert name of person responsible for filing) with your
Foreign Transferors correct taxpayer identification number. If you do not provide
Sales or exchanges involving foreign transferors are reportable (insert name of person responsible for filing) with your correct
on Form 1099-S. For information on the transferee's taxpayer identification number, you may be subject to civil or
responsibility to withhold income tax when a U.S. real property criminal penalties imposed by law.”
interest is acquired from a foreign person, see Pub. 515,
Withholding of Tax on Nonresident Aliens and Foreign Entities. The solicitation must contain space for the name, address,
and TIN of the transferor, and a place to certify under penalties
Multiple Transferors of perjury that the TIN furnished is the correct TIN of the
transferor. The certification must read similar to: “Under
For multiple transferors of the same real estate, you must file a
penalties of perjury, I certify that I am a U.S. person or U.S.
separate Form 1099-S for each transferor. At or before closing,
resident alien and the number shown on this statement is my
you must request from the transferors an allocation of the gross
correct taxpayer identification number.”
proceeds among the transferors. The request and the response
are not required to be in writing. You must make a reasonable If you use a Closing Disclosure, you may provide a copy of
effort to contact all transferors of whom you have knowledge. such statement, appropriately modified to solicit the TIN, to the
However, you may rely on the unchallenged response of any transferor. Keep the Form W-9, W-8, or substitute form in your
transferor, and you need not make additional contacts with other records for 4 years.
transferors after at least one complete allocation is received
(100% of gross proceeds, whether or not received in a single Separate Charge Prohibited
response). If you receive the allocation, report gross proceeds
on each Form 1099-S accordingly. You may not charge your customers a separate fee for
complying with the Form 1099-S filing requirements. However,
You are not required to, but you may, report gross proceeds you may take into account the cost of filing the form in setting the
in accordance with an allocation received after the closing date fees you charge your customers for services in a real estate
but before the due date of Form 1099-S (without extensions). transaction.
However, you cannot report gross proceeds in accordance with
Instructions for Form 1099-S (2021) -3-

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Statements to Transferors If you are reporting a like-kind exchange of property for which
If you are required to file Form 1099-S, you must furnish a no gross proceeds are reportable, enter -0- (zero) in box 2 and
statement to the transferor. Furnish a copy of Form 1099-S or an enter an “X” in the checkbox in box 4.
acceptable substitute statement to each transferor. For more Gross proceeds do not include the value of property or
information about the requirement to furnish a statement to the services received or to be received by, or on behalf of, the
transferor, see part M in the 2021 General Instructions for transferor, or separately stated cash received for personal
Certain Information Returns. property, such as draperies, rugs, or a washer and dryer.
You are not required to indicate on Form 1099-S that the Do not reduce gross proceeds by any expenses paid by the
TIP transferor's (seller's) financing was federally subsidized. transferor, such as sales commissions, deed preparation,
Also, you are not required to enter the following. advertising, and legal expenses. If a Closing Disclosure is used
for a transfer of real estate for cash and notes only, gross
• Both total gross proceeds and the allocated gross proceeds proceeds will generally be the contract sales price shown on that
for a multiple transferor transaction (enter either one or the statement. If other property or services were exchanged, see the
other). box 4 instructions, later.
• An indication that the transferor may receive property or
services for an obligation having a stated principal amount. Contingent payment transaction. A contingent payment
• An indication that, in connection with a contingent payment transaction is one in which the receipt, by or on behalf of the
transaction, the transferor may receive gross proceeds that transferor, is subject to a contingency. The maximum
cannot be determined with certainty under the regulations and is determinable proceeds means the greatest amount of gross
not included in gross proceeds. proceeds possible if all the contingencies are satisfied. If the
maximum amount of gross proceeds cannot be determined with
Truncating transferor's TIN on payee statements. Pursuant certainty, the maximum determinable proceeds are the greatest
to Regulations section 301.6109-4, all filers of this form may amount that can be determined with certainty.
truncate a transferor’s TIN (social security number (SSN),
individual taxpayer identification number (ITIN), adoption Box 3. Address (Including City, State, and ZIP
taxpayer identification number (ATIN), or employer identification Code) or Legal Description
number (EIN)) on payee statements. Truncation is not allowed
on any documents the filer files with the IRS. A filer’s TIN may Enter the address of the property, including the city, state, and
not be truncated on any form. See part J in the 2021 General ZIP code. If the address does not sufficiently identify the
Instructions for Certain Information Returns. property, also enter a legal description, such as section, lot, and
block. For timber royalties, enter “Timber royalties.” For
lump-sum timber payments, enter “Lump-sum timber payment.”
Filer's Name, Address, and Telephone Number
Box Box 4. Check Here if the Transferor Received or
Enter the name, address, and telephone number of the person Will Receive Property or Services as Part of the
who is filing Form 1099-S. The name and address must be the
same as the filer information reported on Form 1096. Consideration
If the transferor received or will receive property (other than cash
Transferor's Name and Address Box and consideration treated as cash in figuring gross proceeds) or
Enter the name and address of the seller or other transferor of services as part of the consideration for the property, enter an
the real estate. If spouses are joint sellers, it is only necessary to “X” in the checkbox in box 4.
enter one name and the TIN for that person on the form.
Box 5. Check Here if the Transferor is a Foreign
Account Number Person (Nonresident Alien, Foreign Partnership,
The account number is required if you have multiple accounts for Foreign Estate, or Foreign Trust)
a recipient for whom you are filing more than one Form 1099-S. If the transferor is a foreign person (nonresident alien, foreign
Additionally, the IRS encourages you to designate an account partnership, foreign estate, or foreign trust), enter an "X" in the
number for all Forms 1099-S that you file. See part L in the 2021 checkbox in box 5. See Form 8288 and its separate instructions
General Instructions for Certain Information Returns. for tax withholding requirements for properties sold by a foreign
transferor.
Box 1. Date of Closing
Enter the closing date. On a Closing Disclosure, the closing date Box 6. Buyer's Part of Real Estate Tax
is the Closing Disclosure date. If a Closing Disclosure is not For a real estate transaction involving a residence, enter the real
used, the closing date is the earlier of the date title transfers or estate tax paid in advance that is allocable to the buyer. You do
the date the economic burdens and benefits of ownership shift to not have to report an amount as allocable to the buyer for real
the transferee. estate taxes paid in arrears. You may use the appropriate
information included on the Closing Disclosure, or comparable
Box 2. Gross Proceeds form, provided at closing. For example, a residence is sold in a
Enter the gross proceeds from the sale or exchange of real county where the real estate tax is paid annually in advance. The
estate. Gross proceeds means any cash received or to be seller paid real estate taxes of $1,200 for the year in which the
received for the real property by or on behalf of the transferor, sale took place. The sale occurred at the end of the 9th month of
including the stated principal amount of a note payable to or for the real estate tax year. Therefore, $300 of the tax paid in
the benefit of the transferor and including a note or mortgage advance is allocated to the buyer, by reference to the amount of
paid off at settlement. If the transferee assumes a liability of the real estate tax shown on the Closing Disclosure as paid by the
transferor or takes the property subject to a liability, such liability seller in advance, and is reported in box 5. See Notice 93-4,
is treated as cash and is includible as part of gross proceeds. 1993-1 C.B. 295.
For a contingent payment transaction, include the maximum
determinable proceeds. Also see Multiple Assets Sold, earlier.

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