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

[IRonMaN]

Not always.

[dkh]

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]

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.

[mac20coaching]

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]

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.

[dkh]

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

[mac20coaching]

I'd have to ask but I do know this was their primary residence that they lived in for the last 6 years.

[mac20coaching]

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]

1099-S is issued based on Gross Sales Price.

[dd4vols]

Net proceeds (the $20K, etc), has absolutely nothing to do with the 1099-S issuance.   And as for the issuance of the 1099-S, they are not necessarily issued in January of the following year. I have found it's a pretty common practice to issue a "Substitute Form 1099-S" inside the closing documents at the actual date of closing...and people never notice them until you make them go through that mass of paperwork.

[mac20coaching]

Thank you.  Is it fair to say the Title Company may also have a copy of the 1099-S?

[dkh]

Yes. All the information would be on the Settlement Statement - no need to have the 1099-S.

[abctax55]

The 1099-S... for sale... is for the gross selling price. The net is irrelevant.

[abctax55]

Exactly what are you trying to accomplish?

[dkh]

I'm guessing the seller made more than $250k/$500k profit on a principal residence sale and they're hoping the 1099-S won't reveal the gross sale price.......................🤔

[mac20coaching]

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?

[abctax55 · Accepted solution]

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.

[BobKamman]

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.

1. 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 

[taxes96786]

No 1099s if it is a private sale and did not go through an escrow office. If you received 1099s report it regardless...or you will get a love letter from IRS for not reporting. They have no way of knowing whether any of it is taxable unless you report the details.

[taxes96786]

Gross proceeds. You need to do the deductions from proceeds by a detailed report.