Proceeds From Real Estate Transactions

2010

Department of the Treasury
Internal Revenue Service

Instructions for Form 1099-S
Section references are to the Internal Revenue Code unless
otherwise noted.

What’s New
Reporting lump-sum timber payments. Sales and
exchanges of standing timber for lump-sum payments
completed after May 28, 2009, must now be reported on
Form 1099-S.
Truncating transferor identification number on paper
payee statements. Notice 2009-93 allows filers of this
form to truncate a transferor’s identification number (social
security number (SSN), individual taxpayer identification
number (ITIN), or adoption taxpayer identification number
(ATIN)) on paper payee statements for tax years 2009 and
2010. See part M in the 2010 General Instructions for
Certain Information Returns (Forms 1098, 1099, 3921,
3922, 5498, and W-2G).

Reminder
In addition to these specific instructions, you should also use
the 2010 General Instructions for Certain Information
Returns. Those general instructions include information
about the following topics.
• Backup withholding.
• Electronic reporting requirements.
• Penalties.
• Who must file (nominee/middleman).
• When and where to file.
• Taxpayer identification numbers.
• Statements to recipients.
• Corrected and void returns.
• Other general topics.
You can get the general instructions from the IRS website
at www.irs.gov or by calling 1-800-TAX-FORM
(1-800-829-3676).

Specific Instructions
File Form 1099-S, Proceeds From Real Estate
Transactions, to report the sale or exchange of real estate.

Reportable Real Estate
Generally, you are required to report a transaction that
consists in whole or in part of the sale or exchange for
money, indebtedness, property, or services of any present
or future ownership interest in any of the following:
1. Improved or unimproved land, including air space;
2. Inherently permanent structures, including any
residential, commercial, or industrial building;
3. A condominium unit and its appurtenant fixtures and
common elements, including land; and
4. Stock in a cooperative housing corporation (as defined
in section 216).
Sale or exchange. A sale or exchange includes any
transaction properly treated as a sale or exchange for
federal income tax purposes, even if the transaction is not
currently taxable. For example, a sale of a principal
residence may be a reportable sale even though the
transferor may be entitled to exclude the gain under section

121. But see Exceptions on this page. Also, a transfer to a
corporation that qualifies for nonrecognition of gain under
section 351 is a reportable exchange. In addition, a transfer
under a land contract is reportable in the year in which the
parties enter into the contract.
Ownership interest. An ownership interest includes fee
simple interests, life estates, reversions, remainders, and
perpetual easements. It also includes any previously created
rights to possession or use for all or part of any particular
year (for example, a leasehold, easement, or timeshare), if
such rights have a remaining term of at least 30 years,
including any period for which the holder may renew such
rights, determined on the date of closing. For example, a
preexisting leasehold on a building with an original term of
99 years and a remaining term of 35 years on the closing
date is an ownership interest; however, if the remaining term
is 10 years, it is not an ownership interest. An ownership
interest does not include any option to acquire real estate.
Involuntary conversion. A sale of real estate under threat
or imminence of seizure, requisition, or condemnation is
generally a reportable transaction.
Timber. Report on Form 1099-S payments of timber
royalties made under a pay-as-cut contract, reportable
under section 6050N. For more information, see
Announcement 90-129, 1990-48 I.R.B. 10. Also report on
Form 1099-S sales or exchanges of standing timber for
lump-sum payments.

Exceptions
The following is a list of transactions that are not reportable;
however, you may choose to report them. If you do, you are
subject to the rules in these instructions.
1. Sale or exchange of a principal residence (including
stock in a cooperative housing corporation) for $250,000 or
less ($500,000 or less for married filing a joint return) and
you received an acceptable written assurance (certification)
from the seller. The certification must include information to
support the conclusion that the full gain on the sale is
excludable from the seller’s gross income. If there are joint
sellers, you must obtain a certification from each seller
(whether married or not) or file Form 1099-S for any seller
who does not make the certification. The certification must
be signed by each seller under penalties of perjury.
A sample certification format can be found in Revenue
Procedure 2007-12, 2007-4 I.R.B. 354, available at www.irs.
gov/irb/2007-04_IRB/ar09.html.
You may get the certification any time on or before
February 15 of the year after the year of sale. You may rely
on the certification and not file or furnish Form 1099-S
unless you know that any assurance on the certification is
incorrect.
You must retain the certification for 4 years after the year
of sale. You may retain the certification on paper, microfilm,
microfiche, or in an electronic storage system.
You are not required to obtain the certification. However,
if you do not obtain it, you must file and furnish Form
1099-S.
2. Any transaction in which the transferor is a corporation
(or is considered to be a corporation under Regulations
section 1.6045-4(d)(2)); a governmental unit, including a

Cat. No. 27988X

foreign government or an international organization; or an
exempt volume transferor. Under this rule, if there are
exempt and nonexempt transferors, you must file Form
1099-S only for the nonexempt transferors.
An exempt volume transferor is someone who sold or
exchanged during the year, who expects to sell or exchange
during the year, or who sold or exchanged in either of the 2
previous years, at least 25 separate items of reportable real
estate to at least 25 separate transferees. In addition, each
item of reportable real estate must have been held, at the
date of closing, or will be held, primarily for sale or resale to
customers in the ordinary course of a trade or business. You
are not required to report an exempt volume transferor’s
transactions if you receive the penalties of perjury
certification required by Regulations section 1.6045-4(d)(3).
3. Any transaction that is not a sale or exchange,
including a bequest, a gift (including a transaction treated as
a gift under section 1041), and a financing or refinancing
that is not related to the acquisition of real estate.
4. A transfer in full or partial satisfaction of a debt
secured by the property. This includes a foreclosure, a
transfer in lieu of foreclosure, or an abandonment.
5. A de minimis transfer for less than $600. A transaction
is de minimis if it can be determined with certainty that the
total money, services, and property received or to be
received is less than $600, as measured on the closing
date. For example, if a contract for sale provides for total
consideration of “$1.00 plus other valuable consideration,”
the transfer is not a de minimis transfer unless you can
determine that the “other valuable consideration” is less than
$599, as measured on the closing date. The $600 rule
applies to the transaction as a whole, not separately to each
transferor.

is the person who prepares the closing statement, including
a settlement statement or other written document that
identifies the transferor, transferee, and real estate
transferred, and that describes how the proceeds are to be
disbursed.
If no closing statement is used, or if two or more
statements are used, the person responsible for closing is,
in the following order:
a. The transferee’s attorney if the attorney is present at
the delivery of either the transferee’s note or a significant
part of the cash proceeds to the transferor or if the attorney
prepares or reviews the preparation of the documents
transferring legal or equitable ownership;
b. The transferor’s attorney if the attorney is present at
the delivery of either the transferee’s note or a significant
part of the cash proceeds to the transferor or if the attorney
prepares or reviews the preparation of the documents
transferring legal or equitable ownership; or
c. The disbursing title or escrow company that is most
significant in disbursing gross proceeds.
If there is more than one attorney described in (a) or (b),
the one whose involvement is most significant is the person
responsible for filing.
2. If no one is responsible for closing the transaction as
explained in 1 on this page, the person responsible for filing
is, in the following order: (a) the mortgage lender, (b) the
transferor’s broker, (c) the transferee’s broker, or (d) the
transferee.
For purposes of 2 above, apply the following definitions.
a. Mortgage lender means a person who lends new
funds in connection with the transaction, but only if the loan
is at least partially secured by the real estate. If there is
more than one lender, the one who lends the most new
funds is the mortgage lender. If several lenders advance
equal amounts of new funds, and no other person advances
a greater amount of new funds, the mortgage lender is the
one who has the security interest that is most senior in
priority. Amounts advanced by the transferor are not treated
as new funds.
b. Transferor’s broker means the broker who contracts
with the transferor and who is compensated for the
transaction.
c. Transferee’s broker means the broker who
significantly participates in the preparation of the offer to
acquire the property or who presents such offer to the
transferor. If there is more than one such person, the
transferee’s broker is the one who most significantly
participates in the preparation of the acquisition offer. If
there is no such person, the one who most significantly
participates in the presentation of the offer is the
transferee’s broker.
d. Transferee means the person who acquires the
greatest interest in the property. If no one acquires the
greatest interest, the transferee is the person listed first on
the ownership transfer documents.
3. Designation agreement. You can enter into a written
agreement at or before closing to designate who must file
Form 1099-S for the transaction. The agreement will identify
the person responsible for filing if such designated person
signs the agreement. It is not necessary that all parties to
the transaction (or that more than one party) enter into the
agreement.
You may be designated in the agreement as the person
who must file if you are the person responsible for closing
(as explained in 1 on this page), the transferee’s or
transferor’s attorney (as explained in 1 on this page), a title
or escrow company that is most significant in terms of the
gross proceeds disbursed, or the mortgage lender (as
explained in 2a above).

The following are also not reportable if the transaction is
not related to the sale or exchange of reportable real estate.
• An interest in crops (excluding timber) or surface or
subsurface natural resources, that is, water, ores, and other
natural deposits, whether or not such crops or natural
resources are severed from the land. For timber royalties or
lump-sum timber payments, see Timber on page 1.
• A burial plot or vault.
• A manufactured structure used as a dwelling that is
manufactured and assembled at a location different from
that where it is used, but only if such structure is not affixed,
on the closing date, to a foundation. This exception applies
to an unaffixed mobile home.

Who Must File
Generally, the person responsible for closing the
transaction, as explained in 1 below, is required to file Form
1099-S. If no one is responsible for closing, the person
required to file Form 1099-S is explained in 2 on this page.
However, you may designate the person required to file
Form 1099-S in a written agreement, as explained under 3
beginning on this page.
1. If you are the person responsible for closing the
transaction, you must file Form 1099-S. If a Uniform
Settlement Statement, prescribed under the Real Estate
Settlement Procedures Act of 1974 (RESPA), is used, the
person responsible for closing is the person listed as the
settlement agent on that statement. A Uniform Settlement
Statement includes any amendments, variations, or
substitutions that may be prescribed under RESPA if any
such form requires disclosure of the transferor and
transferee, the application of the proceeds, and the name of
the settlement agent or other person responsible for
preparing the settlement statement.
If a Uniform Settlement Statement is not used, or no
settlement agent is listed, the person responsible for closing

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Instructions for Form 1099-S (2010)

The designation agreement may be in any written form
and may be included on the closing statement. It must:
a. Identify by name and address the person designated
as responsible for filing,
b. Include the names and addresses of each person
entering into the agreement,
c. Be signed and dated by all persons entering into the
agreement,
d. Include the names and addresses of the transferor
and transferee, and
e. Include the address and any other information
necessary to identify the property.

proceeds if husband and wife are the only transferors. But if
you receive an uncontested allocation of gross proceeds
from them, file Form 1099-S for each spouse according to
the allocation. If there are other transferors, you must make
a reasonable effort to contact either the husband or wife to
request an allocation.
Partnerships. If the property is transferred by a
partnership, file only one Form 1099-S for the partnership,
not separate Forms 1099-S for each partner.

Multiple Assets Sold
If real estate is sold or exchanged and other assets are sold
or exchanged in the same transaction, report the total gross
proceeds from the entire transaction on Form 1099-S.

Each person who signs the agreement must retain it for 4
years.
For each transaction, be sure that only one person is

Taxpayer Identification Numbers (TINs)

TIP responsible for filing and that only one Form 1099-S

You must request the transferor’s TIN no later than the time
of closing. The TIN request need not be made in a separate
mailing. Rather, it may be made in person, in a mailing that
includes other items, or electronically. The transferor is
required to furnish his or her TIN and to certify that the TIN
is correct. For U.S. persons (including U.S. resident aliens),
you may request a TIN on Form W-9, Request for Taxpayer
Identification Number and Certification. Foreign persons
must provide their TIN to you on the appropriate Form W-8.
See part J in the 2010 General Instructions for Certain
Information Returns.

is filed for each transferor.

Employees, Agents, and Partners
If an employee, agent, or partner, acting within the scope of
such person’s employment, agency, or partnership,
participates in a real estate transaction, only the employer,
principal, or partnership (not the employee, agent, or
partner) may be the reporting person. However, the
participation of a person listed on the Uniform Settlement
Statement as the settlement agent acting as an agent of
another is not attributed to the principal.

Alternatively, you may provide a written statement to the
transferor similar to the following: “You are required by law
to provide (insert name of person responsible for filing) with
your correct taxpayer identification number. If you do not
provide (insert name of person responsible for filing) with
your correct taxpayer identification number, you may be
subject to civil or criminal penalties imposed by law.”

Foreign Transferors
Sales or exchanges involving foreign transferors are
reportable on Form 1099-S. For information on the
transferee’s responsibility to withhold income tax when a
U.S. real property 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 of perjury that the TIN furnished is the
correct TIN of the transferor. The certification must read
similar to: “Under penalties of perjury, I certify that I am a
U.S. person or U.S. resident alien and the number shown on
this statement is my correct taxpayer identification number.”

Multiple Transferors
For multiple transferors of the same real estate, you must
file a separate Form 1099-S for each transferor. At or before
closing, you must request from the transferors an allocation
of the gross proceeds among the transferors. The request
and the response are not required to be in writing. You must
make a reasonable effort to contact all transferors of whom
you have knowledge. However, you may rely on the
unchallenged response of any transferor, and you need not
make additional contacts with other transferors after at least
one complete allocation is received (100% of gross
proceeds, whether or not received in a single response). If
you receive the allocation, report gross proceeds on each
Form 1099-S accordingly.
You are not required to, but you may, report gross
proceeds in accordance with an allocation received after the
closing date but before the due date of Form 1099-S
(without extensions). However, you cannot report gross
proceeds in accordance with an allocation received on or
after the due date of Form 1099-S (without extensions).
If no gross proceeds are allocated to a transferor
because no allocation or an incomplete allocation is
received, you must report the total unallocated gross
proceeds on the Form 1099-S made for that transferor. If
you do not receive any allocation or you receive conflicting
allocations, report on each transferor’s Form 1099-S the
total unallocated gross proceeds.
Husband and wife. If the transferors were husband and
wife at the time of closing, who held the property as joint
tenants, tenants by the entirety, tenants in common, or as
community property, treat them as a single transferor. Only
one Form 1099-S showing either of them as the transferor is
required. You need not request an allocation of gross
Instructions for Form 1099-S (2010)

If you use a Uniform Settlement Statement (under
RESPA), you may provide a copy of such statement,
appropriately modified to solicit the TIN, to the transferor.
Keep the Form W-9 or substitute form in your records for 4
years.

Separate Charge Prohibited
You may not charge your customers a separate fee for
complying with the Form 1099-S filing requirements.
However, you may take into account the cost of filing the
form in setting the fees you charge your customers for
services in a real estate transaction.

Statements to Transferors
If you are required to file Form 1099-S, you must provide a
statement to the transferor. Furnish a copy of Form 1099-S
or an acceptable substitute statement to each transferor. For
more information about the requirement to furnish a
statement to the transferor, see part M in the 2010 General
Instructions for Certain Information Returns.
You are not required to indicate on Form 1099-S that

TIP the transferor’s (seller’s) financing was federally
subsidized. Also, you are not required to enter the
following:
• Both total gross proceeds and the allocated gross
proceeds for a multiple transferor transaction (enter either
one or the other);

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• An indication that the transferor may receive property or

Do not reduce gross proceeds by any expenses paid by
the transferor, such as sales commissions, deed
preparation, advertising, and legal expenses. If a Uniform
Settlement Statement (under RESPA) is used for a transfer
of real estate for cash and notes only, gross proceeds
generally will be the contract sales price shown on that
statement. If other property or services were exchanged,
see Box 4. Check Here if the Transferor Received or Will
Receive Property or Services as Part of the Consideration
below.
Contingent payment transaction. A contingent payment
transaction is one in which the receipt, by or on behalf of the
transferor, is subject to a contingency. The maximum
determinable proceeds means the greatest amount of gross
proceeds possible if all the contingencies are satisfied. If the
maximum amount of gross proceeds cannot be determined
with certainty, the maximum determinable proceeds are the
greatest amount that can be determined with certainty.

services for an obligation having a stated principal amount;
or
• An indication that, in connection with a contingent
payment transaction, the transferor may receive gross
proceeds that cannot be determined with certainty under the
regulations and is not included in gross proceeds.

Filer’s Name and Address Box
Enter the name, address, and telephone number of the
person who is filing Form 1099-S. This information must be
the same as the filer information reported on Form 1096.

Transferor’s Name and Address Box
Enter the name and address of the seller or other transferor
of the real estate. If a husband and wife are joint sellers, it is
only necessary to enter one name and the TIN for that
person on the form.

Account Number

Box 3. Address or Legal Description
(Including City, State, and ZIP Code)

The account number is required if you have multiple
accounts for a recipient for whom you are filing more than
one Form 1099-S. Additionally, the IRS encourages you to
designate an account number for all Forms 1099-S that you
file. See part L in the 2010 General Instructions for Certain
Information Returns.

Enter the address of the property, including the city, state,
and ZIP code. If the address does not sufficiently identify the
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.”

Box 1. Date of Closing
Enter the closing date. On a Uniform Settlement Statement
(under RESPA), the closing date is the settlement date. If a
Uniform Settlement Statement is not used, the closing date
is the earlier of the date title transfers or the date the
economic burdens and benefits of ownership shift to the
transferee.

Box 4. Check Here if the Transferor
Received or Will Receive Property or
Services as Part of the Consideration
If the transferor received or will receive property (other than
cash and consideration treated as cash in computing gross
proceeds) or services as part of the consideration for the
property, enter an “X” in the checkbox in box 4.

Box 2. Gross Proceeds
Enter the gross proceeds from the sale or exchange of real
estate. Gross proceeds means any cash received or to be
received for the real property by or on behalf of the
transferor, including the stated principal amount of a note
payable to or for the benefit of the transferor and including a
note or mortgage paid off at settlement. If the transferee
assumes a liability of the transferor or takes the property
subject to a liability, such liability is treated as cash and is
includible as part of gross proceeds. For a contingent
payment transaction, include the maximum determinable
proceeds. Also see Multiple Assets Sold on page 3.
If you are reporting a like-kind exchange of property for
which no gross proceeds are reportable, enter 0 (zero) in
box 2 and enter an “X” in the checkbox in box 4.
Gross proceeds do not include the value of property or
services received or to be received by, or on behalf of, the
transferor or separately stated cash received for personal
property, such as draperies, rugs, or a washer and dryer.

Box 5. Buyer’s Part of Real Estate Tax
For a real estate transaction involving a residence, enter the
real estate tax paid in advance that is allocable to the buyer.
You do not have to report an amount as allocable to the
buyer for real estate taxes paid in arrears. You may use the
appropriate information included on the HUD-1, or
comparable form, provided at closing. For example, a
residence is sold in a county where the real estate tax is
paid annually in advance. The seller paid real estate taxes
of $1,200 for the year in which the sale took place. The sale
occurred at the end of the 9th month of the real estate tax
year. Therefore, $300 of the tax paid in advance is allocated
to the buyer, by reference to the amount of real estate tax
shown on the HUD-1 as paid by the seller in advance, and is
reported in box 5. See Notice 93-4, 1993-1 C.B. 295.

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Instructions for Form 1099-S (2010)