Form 1099-S

[Joe Btfsplk]

As far as I can tell, this form is still required on the sale of a house. However, when a client sells a house, even a rent house, for under $ 250,000 they never seem to receive a Form 1099-S.

Are the title companies only issuing them for higher-priced sales?

[ChEAr$]

It's being misused,

As far as I can tell, this form is still required on the sale of a house. However, when a client sells a house, even a rent house, for under $ 250,000 they never seem to receive a Form 1099-S.

Are the title companies only issuing them for higher-priced sales?

by not BEING used.

Example. A lawyer handled sale of house inherited by five siblings about a year and
half after death of their father. paperwork was filled out by executor (on of the daughters)
attesting to the fact that the house had been used as personal residence 2 out of 5, etc.
and therefore lawyer was covered for not issuing the 1099s forms.

My question was just how could the house which was actually owned by the estate
have been so used? I had of course cautioned her that she should sell the house
before her father died so as to take advantage of the 2 for 5 rule.

[OldJack]

An archeological team, digging in Washington DC, has uncovered 10,000 year old bones and fossil remains of what is believed to be the first lawyer.

[veritas]

I'll bet he didn't report

his stock sales either.

[Black Bart]

Forms required

As far as I can tell, this form is still required on the sale of a house. However, when a client sells a house, even a rent house, for under $ 250,000 they never seem to receive a Form 1099-S.

Are the title companies only issuing them for higher-priced sales?

Joe/ Here's my understanding of it and somebody can correct me if I'm wrong.

The form is NOT required if it's not a taxable event. There is a form that realtors, title companies, abstracters, etc. have you sign that certifies (don't know exactly how -- maybe the 2 out of 5 years rule except there's the question of profit) that the sale is not taxable. I don't know for sure whether or not they have to send those forms to IRS or not, but I don't think they do.

The reason it's so hard to find a pattern in the issuance of 1099s is that there isn't one -- everybody does it differently -- maybe correctly or maybe not. It's got nothing to do with the price of the house.

As you know, some lawyers issue no 1099s at all. Others issue them on everything, whether it was a 2 out of 5 principal residence sale or the sale of a lot. Some small realtors do the same. Most larger title and abstract companies have you sign the form saying it's not taxable and then do not issue a 1099. If you don't sign the form, then they issue a 1099.

I don't think IRS wants the paperwork which is why they discontinued the requirement for reporting your house sale on your tax return if the exclusion requirements were met. I think they were attempting to shift the burden to realtors, lawyers, etc., but that doesn't really work because many of them don't know (or care) about those rules.

In the final analysis, you never really know for sure if your client got a 1099, lost a 1099, or whether in fact a 1099 was ever issued. About all you can do is try to protect yourself, so what I do is report all house sales on schedule D and take the 121 exclusion if it applies. I always do this whether I have a 1099-S or whether I don't and that way you're covered if one is floating around somewhere at IRS.

[outwest]

Not every sale requires a 1099s

As far as I can tell, this form is still required on the sale of a house. However, when a client sells a house, even a rent house, for under $ 250,000 they never seem to receive a Form 1099-S.

Are the title companies only issuing them for higher-priced sales?

From the instructions for a 1099S (paraphrased)

Exceptions:
1. Sale with less than $250K single, $500k Joint with certification from seller that full gain is excludable from seller's gross income.

Most sale packages I've seen lately have that certification about page 300 or so.

[Joe Btfsplk]

Form 1099 S

From the instructions for a 1099S (paraphrased)

Exceptions:
1. Sale with less than $250K single, $500k Joint with certification from seller that full gain is excludable from seller's gross income.

Most sale packages I've seen lately have that certification about page 300 or so.

That probably explains it. By the time the seller gets to page 300 he is signing everything they put before him without understanding the implications. The Title Company is probably equally unconcerned since they have his signature as their protection

[Black Bart]

$250k

From the instructions for a 1099S (paraphrased)

Exceptions:
1. Sale with less than $250K single, $500k Joint with certification from seller that full gain is excludable from seller's gross income.

Most sale packages I've seen lately have that certification about page 300 or so.

Hmm; I stand corrected. Nice goin', outwest (read the instructions, eh?). But anyhow, I still think the rest of it's true about some do, some don't.