What You Need to Know About Form 1099-S: A Comprehensive Guide

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Filing taxes can often seem daunting, especially when it comes to reporting real estate transactions. Form 1099-S, designed explicitly for the sale or exchange of real estate, is crucial for ensuring accurate reporting for buyers and sellers. Understanding how to complete and file this form properly is essential to avoid potential penalties and ensure compliance with IRS regulations.

In this blog, we’ll walk you through everything you need to know about filing Form 1099-S online. From IRS requirements to helpful tips for a seamless filing process, you’ll be equipped with the knowledge to navigate this important tax form confidently and efficiently.

Let’s get started.

Form 1099-S: Proceeds from Real Estate Transactions

Form 1099-S is an IRS tax form known as “Proceeds from Real Estate Transactions,” used to report real estate sales or exchange. This includes sales or exchange for money, property, indebtedness, service, or ownership interest in any of the following:

1. Improved or unimproved land, including air space.
2. Permanent structures including residential, commercial, or industrial buildings.
3. Condominium unit, including land.
4. Stock in a cooperative housing corporation.
5. 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 to 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 for the 2024 Tax Year:

The IRS requires certain specific information to be filled out in Form 1099-S. in total, Form 1099-S has six boxes. Let’s have a closer look at the breakdown of information that needs to be filled out in 1099-S:

• Filer Information this includes the name, address, TIN, and telephone number of the filer who is filing Form 1099-S
• Transferor’s Information includes the name, TIN, and address of the seller or transferor of the real estate.
• Box 1 (Date of Closing): Enter the date when the real estate transaction was closed. This date depends on the following factors:
  • If using closing disclosure:  The closing date is the same as the closing disclosure date.
  • If not using closing disclosure: The closing date will be marked by either the legal transfer of ownership or the point at which the buyer starts to bear the economic burden and reap the benefits of owning the property (also called the transferee), whichever happens first.

• Box 2 (Gross Proceeds): Enter the gross proceeds from the sale or exchange of real estate transaction. The gross proceeds generally mean the cash received or to be received by the seller, the principal amount of any note payable to the seller, or mortgage paid off at the settlement. For contingent transactions, include the maximum determinable proceeds—this means reporting the highest amount of proceeds that can be reasonably determined at closing, even if some payments are contingent on future events. The gross proceeds do not include the value of the transferor’s property or service or separately stated cash received for personal property (rugs, washer, or dryer).

• Box 3 (Address): Enter the property’s complete address, including city, state, and ZIP code. If the address provided does not identify the property correctly, enter a legal description such as section, lot, and block. 
• Box 4 (Transferor received or will receive property or services):  Enter an “X” in the checkbox in box 4 if the transferor received or will receive property or services as part of the consideration of the property.
• Box 5 (Transferor is a foreign person):  Enter an “X” in the checkbox in box 5 if the transferor is a foreign person (nonresident alien, foreign partnership, foreign estate, or foreign trust).
• Box 6 (Buyer’s part of real estate tax): Enter the real estate tax paid in advance that is allocable to the buyer for a real estate transaction that involves residence. You do not have to report real estate taxes paid in arrears.

Learn more about the Form 1099-S Instructions in detail here.

When is the Deadline to File Form 1099-S?

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. Learn more

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. 

Simplify Your 1099-S Filings With TaxBandits!

Once you have all the necessary information, e-filing Form 1099-S with TaxBandits is secure and straightforward. 

By creating a free account in TaxBandits, you can file your 1099-S form by entering the required information, reviewing the form summary, and transmitting it to the IRS. To guarantee the accurate submission of your 1099-S forms, you can use our built-in data validation features, such as internal audit, TIN Matching, and USPS validation. 

With our bulk data upload options, you can enter data manually or through a standard CSV upload template to file multiple returns and streamline the e-filing process.

TaxBandits supports e-filing and provides seamless solutions for recipient copy distribution. These options include online access, postal mailing, or advanced distribution, which combine both services.

Get Started with TaxBandits today for simple and secure Form 1099-S solutions!