Form 1099 S: Proceeds From Real Estate Transactions

Form 1099-S, officially titled "Proceeds From Real Estate Transactions," reports the sale or exchange of real property. It's issued by the closing agent (escrow agent, settlement agent, or title company) involved in the transaction.

What Does Form 1099-S Report?

The form details the following:

  1. Date of Sale: The date the ownership of the property officially transferred.
  2. Gross Proceeds: The total sale price of the real estate. (Note: This may not be your actual profit.)

What Types of Real Estate Does Form 1099-S Apply To?

Form 1099-S applies to a broad range of real estate transactions, including:

  1. Sale of land, both improved and unimproved
  2. Sale of permanent buildings
  3. Sale of condominiums, including fixtures and the underlying land
  4. Sale of shares in a cooperative housing corporation (Section 216)
  5. Sale of non-contingent interests in standing timber (e.g., royalties)

How Does Form 1099-S Relate to Capital Gains?

  • When you sell real estate for more than you paid for it, you generally incur a capital gain.
  • Form 1099-S provides the gross proceeds figure, which is a key factor in calculating your capital gain.
  • However, the form itself doesn't calculate the capital gain or loss. You'll need to factor in your original purchase price, selling expenses, and any relevant depreciation to determine your final capital gain or loss.

How to Use Form 1099-S for Tax Reporting?

  • The information on Form 1099-S should be used to report the sale of your real estate on your tax return.
  • Depending on how you used the property (primary residence, investment property, business property), the specific form and section for reporting will vary.