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Is a 1099-S always issued when there is a sale of a primary residence?

Forum|Forum|4 years ago
March 29, 2022
5 replies
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Best answer by abctax55

One of the things I'm trying to understand is: does the sale have to be reported on the return if the proceeds are less than $250k(the taxpayer is single) as there would be no capital gains tax? Or must all sales always be reported regardless?

IRS says no, if gain is excludable.

Many of us pro's report anyway (hi Bob) just to forestall future love letters from the government.

IRonMaN

Level 15

Not always.

Slava Ukraini!

M

mac20coachingAuthor

Level 4

Thank you. Is it determined based on the Sales Price of the transaction or the actual Net Proceeds after the mortgage has been paid off?

IRonMaN

Level 15

One big factor is, did they sign the little form at closing saying the property was their primary residence for 2 out of the last 5 years.

Slava Ukraini!

dkh

Level 15

Not always. Sometimes clients tell you there isn't one but if you dig through the pile of paperwork you might be able to find one.

PATAX

Level 12

I think it is supposed to be issued if it is over a certain amount, i.e. over the taxable threshold. But sometimes you'll see one issued if it is lower especially if an attorney or someone else who's not in the real estate business prepares the form. Just my opinion.

dkh

Level 15

Are you trying to determine what to use for selling price? Get the Seller's Closing Statement

M

mac20coachingAuthor

Level 4

I'm trying to determine if a 1099-S is issued based on the Sales Price being over $250k or if the actual Net Proceeds are over $250k. If I sell a property at $260k and the mortgage payoff is $240k, my Net Proceeds are $20k. Would a 1099-S be issued?

sjrcpa

Level 15

1099-S is issued based on Gross Sales Price.

The more I know the more I don’t know.

BobKamman

Level 15

I vote in favor of debating this all night and half of Tuesday instead of actually looking up the IRS instructions for Form 1099-S.

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.

Sale or exchange of a residence (including stock in a cooperative housing corporation) for $250,000 or less if you received an acceptable written assurance (certification) from the seller that such residence is the principal residence (within the meaning of section 121) of the seller and the full amount of the gain on such sale is excludable from gross income under section 121. If the certification includes an assurance that the seller is married, the preceding sentence shall be applied by substituting “$500,000” for “$250,000.” (Emphasis added)

https://www.irs.gov/instructions/i1099s#en_US_202201_publink1000280427

Exceptions

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