comprehensive guide to i.r.s 1099 -s reporting for … guide to i.r.s 1099 reporting for real estate...

Internal use only – confidential and proprietary to First American Financial Corporation and its affiliates – do not disclose to third parties. Comprehensive Guide to I .R.S 1099 Reporting for Real Estate Transactions | 05/01/2018

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Comprehensive Guide to I.R.S 1099-S Reporting for Real Estate Transactions Audience: Source of Truth for Direct, NCS, Mortgage Solutions and Agency Employees – For Internal Use Only Table of Contents Overview ........................................................................................................................................................................ 2 Common Forms Used for Reporting ............................................................................................................................ 4 1099 Reporting Process ................................................................................................................................................ 7 Reporting by Type of Seller .......................................................................................................................................... 8

Corporation ................................................................................................................................................................ 8 Estates ........................................................................................................................................................................ 8

Surviving Joint Owners ......................................................................................................................................... 8 Foreign Sellers ........................................................................................................................................................... 8 Governmental Entities............................................................................................................................................... 9 Married Couple .......................................................................................................................................................... 9 Individual .................................................................................................................................................................... 9 Limited Liability Company (LLC) ................................................................................................................................ 9 Multiple Sellers ........................................................................................................................................................ 10 Partnership............................................................................................................................................................... 10 Sole Proprietor ......................................................................................................................................................... 10 Trusts ........................................................................................................................................................................ 10

First American Title, as Trustee is Seller............................................................................................................ 11 Reporting by Transaction Type................................................................................................................................... 11

Bulk Volume Transfers ............................................................................................................................................ 11 Exchanges ................................................................................................................................................................ 11 Fractional Exchange................................................................................................................................................. 12 Involuntary Conversion ........................................................................................................................................... 12 Refinance Transaction ............................................................................................................................................. 12 Short Sale ................................................................................................................................................................. 12 Multiple Properties.................................................................................................................................................. 12 REO - Real Estate Owned ........................................................................................................................................ 12

Seller refuses to provide or does not have SSN/TIN ................................................................................................. 12 Reference ..................................................................................................................................................................... 13

1099 Classifications in FAST .................................................................................................................................... 13 Alternative Ways to Gather 1099-S Information ................................................................................................... 13 Additional 1099-S I.R.S. Information ...................................................................................................................... 14



Overview Transferors (“sellers”) of real property, under guidelines established by the Internal Revenue Service (“I.R.S.”), are required to have the gross proceeds from the sale reported on a Form 1099-S. The person responsible for closing the transaction is responsible for the delivery of the seller's gross proceeds information to the I.R.S.1 The I.R.S. defines the person responsible for closing the transaction as the person listed on the HUD-1, closing disclosure, or Settlement Statement as the Settlement Agent2. If no closing statement is used or no Settlement Agent is listed, the person responsible for closing the transaction is the person who prepares the closing statement, or other written document that identifies the transfer, transferee, reasonably identifies the real estate transferred and that describes how the proceeds are to be or were disbursed3. Failure to report gross proceeds can result in I.R.S. reporting penalties. Gross proceeds will typically be the same dollar amount as the contract sales price. Gross proceeds are any cash received or to be received for real property by or on behalf of the transferor, including the stated principal amount of a note payable to or for the benefit of the seller and including a note or deed of trust paid off at the closing. If the buyer (transferee) assumes liability of the transferor or takes the property subject to an existing lien, such lien is treated as cash and is included as part of the gross proceeds. Gross proceeds do not include the value of property or services received or to be received by, or on behalf of, the seller or separately stated cash received for personal property, such as draperies, pool equipment, carpeting or a washer and dryer.4 The Form 1099-S was adopted by the I.R.S. for submitting the seller's gross proceeds information. The information from the form is reported by the Settlement Agent to the I.R.S., and a statement must be furnished to the seller. The Settlement Agent is also required to keep a master copy of all transactions reported for a certain number of years from the closing date of the transaction. The I.R.S requires certain information to be provided when reporting:5

1. The name, address and taxpayer ID number; social security number (SSN) or tax identification number, often called the "TIN" of the seller;

2. A general description of the property (in most cases the address); 3. The closing date; 4. The gross proceeds of the transaction; 5. Whether any property was involved as part of the transaction other than cash or consideration treated

as cash; 6. The name, address and taxpayer identification number of the Settlement Agent; 7. Real estate tax paid in advance that is allocable to the buyer. In a transaction involving the sale of a

single-family residence, if the seller paid real estate taxes in advance and then received credit for taxes from the buyer through the transaction, the prorated tax amount MUST be reported.

8. Box 5 must be checked if the seller is a foreign person (nonresident alien, foreign partnership, foreign estate or foreign trust).6

Non-Exempt Reportable Transactions Reportable real estate transactions include any present or future “Ownership Interest.” An Ownership Interest includes fee simple interests, life estates, reversions, remainders and perpetual easements. It also includes any previously created rights to possession or use for all or part of any particular year (for example, a leasehold, easement, or timeshare), if such rights have a remaining term of at least 30 years, including any period for which the holder may renew such rights determined on the date of closing. For example, a



preexisting leasehold on a building with an original term of 99 years and a remaining term of 35 years on the closing date is an Ownership Interest; however, if the remaining term is ten years, it is not an Ownership Interest. An Ownership Interest does not include any option to acquire real estate. An ownership Interest also includes any contractual interest in a sale or exchange of standing timber for a lump-sum payment that is fixed and not contingent.7 Typical reportable real estate transactions with Ownership Interest include the following;

• Improved and unimproved land, including air space. Improved land is typically land that has been prepared for development by grading, draining, and installation of utilities or access. And, unimproved land most commonly refers to land without improvements or buildings but can also mean land in its natural state.

• Inherently permanent structure, including residential, commercial or industrial buildings.

Affixed homes count as Reportable Real Estate, including modular or mobile homes which are affixed to real estate. For an un-affixed mobile home report the real property value (value of land), which is usually disclosed within the contract.

• Any condominium unit and its appurtenant fixtures and common elements (including land).

• Stock in a cooperative housing corporation. With a co-op: you do not own the individual unit,

you own a percentage of the whole, and is reportable Exempt Transactions and Sellers Some transactions and some sellers are specifically excluded or exempt from reporting. Transactions that are exempt are (a) foreclosures (b) abandonment of real property and (c) financings or refinancing of properties. Also exempt from reporting are transactions for a second mortgage, de minimis transfers (sales price $600 or less), and deeds in lieu of foreclosure.8 Other exempt transactions may include escrow only (where there is no conveyance), and convenience transactions (to be on a deed as a matter of convenience: no ownership in property; used for estate planning purposes). Sellers that are exempt from reporting include corporations, a governmental unit or an exempt volume transferor.9 An example of an exempt Volume Transferor is a small builder or REO seller who is not a corporation. Exempt Volume Transferors must certify that they have sold at least 25 separate items of the reportable real estate to at least 25 separate buyers during either of the two prior calendar years, or during the current calendar year, or expect to sell 25 properties during the current calendar year. They must complete a Certification of Exempt Status.

Be aware that the above exceptions only apply to 1099-S Reporting and not other types of reporting such as FIRPTA or state withholding. Additionally, 1099-S reporting is not required for the sale or exchange of a principal residence with gross proceeds of $250,000 or less for an individual or $500,000 or less for married filing jointly provided an acceptable certification from the seller is obtained that indicates the full gain is excludable from the seller’s gross income.10 An acceptable form of seller certification is the Certification of No Information Reporting form found in the 1099S Cert/InfoReq-All-Resid FAST form.



Common Forms Used for Reporting There are several 1099-S information gathering forms available for different reporting circumstances. The forms are to be filled out by the seller. The most common forms used are the Seller Certification and Information Request. Seller Certification Form The Seller Certification form is used with residential transactions to determine if the seller is exempt from reporting because the property is their principal residence and meets other criteria. First, the gross proceeds must be $500,000 or less for married filing a joint tax return or $250,000 or less for individuals filing a separate tax return. Each seller MUST complete their own Seller Certification even if the property and transaction are exempt from reporting. This individual reporting requirement applies even if the sellers are a married couple. Conversely, if the property is NOT the seller’s principal residence, and the sales price is over the requisite amount, or the seller is deceased, then Seller Certification form does not apply and is not to be presented to the Seller. The Seller Certification has three parts. Figure 1. “Seller Certification Form,” used for Residential transactions11

Part 1 – Seller Information - FAST will pull in the property address. The seller must complete their name and taxpayer ID number.



Part 2 – Seller Assurances - The seller will answer the six questions as True, False or N/A and indicate “I am” or “I am not” a foreign person. If all responses are marked True or all responses to questions 1 thorugh 5 are marked True and the response to #6 is N/A, then the seller’s interest is exempt from 1099-S reporting. Part 3 – Seller Certification – The seller will sign and date this section, declaring under penalty of perjury the information that has been provided is true. Information Request Form The seller completes the Information Request form on all transactions that require reporting. This form contains general and specific instructions to help the seller determine what information to provide. Figure 2. “Information Request Form”

The first line is for the seller to enter their name exactly as it appears on their tax return. This is important, as the I.R.S. must be able to match the 1099-S to the tax return; so it may be different from how the seller holds title to the property. The sellers must indicate on the 2nd line any difference between their name shown on their income tax return and the name of the entity that holds title to the property being sold. The third line is where the seller must indicate their type of ownership entity. The sellers will check a box, and in the case of an LLC or ‘Other’ type of entity and must give you additional information. Next is a space for the sellers to provide a valid forwarding address. The seller fills out the percentage of ownership. The Settlement Agent needs to verify that 100% of the ownership interest is accounted for if there are multiple sellers. The seller must indicate the number of sellers including themselves. In Part I, the seller must provide either the Social Security Number (SSN) or Entity Identification Number (EIN) for reporting. Typically, a tax return filed under an entity name, such as a business or partnership, will have an EIN and individuals will typically have an SSN. Both of these are considered Taxpayer Identification Numbers (TINs) Part II is to be signed and dated by a US Person. If the seller is foreign, he or she must sign and date in Part III. In FAST, 1099-S form(s) are included in the opening letters for some states. For those states that do not have opening letters/packages, locate these corporate forms in the Template Type: Form. Below are forms that are frequently used in FAST.



1099S Cert/InfoReq-All-Resid – This document contains both the Certification of No Information Reporting and Information Request forms. Use this document for residential transactions unless you KNOW the sales price does not qualify the property for the exemption (over $500,000 for a married couple, filing a joint tax return and over $250,000 for an individual filing a separate tax return) or it is an investment property. 1099S InfoReq-All – This document contains the Information Request Form only. Use on commercial, non-residential, or investor transactions. It can also be used for transactions over $500,000 for a married couple, over $250,000 for a single person and transactions with foreign sellers. Below are some less frequently used forms available in FAST: 1099S Cert-Stand Alone-All – This document contains a Certification of No Information Reporting alone. 1099S Cert/InfoReq-Ind-Resid – This document contains both the Certification of No Information Reporting and Information Request Form. This form allows you to pick a seller and print the form for the chosen seller only. 1099S InfoReq-Ind – This document contains just the Information Request Form and allows you to pick a seller and print the form for the chosen seller only. 1099S Certificate of Exempt Status- This form can be used when the seller claims they are selling 25 or more properties during the time frames referenced in the certification (.e.g., builder transactions). Keep this document in a master file. If the seller is foreign but otherwise exempt, then no 1099-S filing is required. However, FIRPTA and state withholding requirements still apply. 1099S Affidavit Failure to Provide TIN – A Settlement Agent would use this FAST document after exhausting all avenues to obtain necessary reporting information from the seller.



1099 Reporting Process 1. Verify consideration is being paid for the transfer of real property: in other words, something of value

is being provided in exchange for ownership of the property. 2. Make initial exempt or reportable determination and identify documents required, if any.

i. Determine by type of seller which FAST document, if any, shall be issued for the seller to complete and sign.

• Example: If the seller is a corporation, no document needs to be completed • If the seller is an LLC or partnership, obtain an Information Request form. When

returned, determine all necessary information be provided a. Part I information is complete. Name, entity (if applicable) and entity

type checkbox including designation, forwarding address, and percentage owned boxes are filled in AND; Part II is signed and dated.

b. If an LLC claims it is treated as a corporation for tax reporting purposes, classify as “N/A” in FAST

c. If an LLC or partnership provides an EIN, report the entity name provided with that EIN

d. If an LLC states that it is a single member disregarded entity, report the TIN and name of the sole member

• Example: If the seller is exempt from filing due to “Volume Transfers” (which is defined as 25 or more in the calendar year) and has completed the 1099S Certificate of Exempt Status form in FAST. Classify as “Certificate of Exempt Status“ in FAST

ii. Determine by transaction Type which FAST document, if any, shall be issued for the seller to complete and sign

• Example: If the property is a principal residence with a sales price of less than $250,000 or less for an individual filing a separate tax return, or $500,000 or less for a married couple filing a joint tax return, and the seller has already completed a 1099S Cert/InfoReq-All-Resid form, then verify the answers in Part II of the form are “True” for assurances 1 thru 5, and “True” or “N/A” for assurance 6, and classify as “N/A” ” in FAST

3. Obtain any complete seller documents. 4. Complete reporting in FAST (for step by step instructions see the 1099-S FAST Process Guide).



Reporting by Seller Type Corporation Corporations are exempt from reporting. In FAST, the classification is N/A. Reporting Requirements Seller’s name must contain an unambiguous expression of corporate status such as Incorporated, Inc., Corporation, Corp., or P.C. (but not Company or Co.). Seller's name contains the term: Insurance Company, Reinsurance Company or Assurance Company, these entities are required to be corporations. The transfer documents indicate the corporate status of the seller (transferor). If any of the above is true, no forms are required. Neither the Certification of No Information Reporting nor the Information Request Form is required. Estates The Estate of the deceased person is reportable and is reported under the Estate’s TIN. The TIN is not the deceased person’s SSN or the Executor’s or Administrator’s SSN. The 1099S InfoReq-All (Information Request form) FAST document will reflect the Estate’s Name on the first name line and ‘same’ in the second name line, and the EIN for the estate. Reporting Requirements Estates must be reported under the EIN assigned to the estate. If the estate has not yet obtained an EIN for the estate at closing and is in the process of applying for one, delay the filing of the 1099-S form until the EIN has been received from the estate. Do not report under the executor, administrator or personal representative's SSN. When reporting an EIN, show the name of the estate on the top name line. Surviving Joint Owners Report a surviving joint owner (e.g., a joint tenant) using their SSN when no probate of a will or administration of an estate is necessary. Foreign Sellers Most foreign sellers are reportable and may require reporting. Many sellers who own property in the United States who are foreign have a TIN and file tax returns. Check either the Seller Certification form or the Information Request form to determine if the Seller is foreign. If the Foreign Seller cannot or will not provide their SSN/TIN, print and sign the 1099S Affidavit Failure to Provide TIN FAST form.

• Provide the seller the FAST Information Request using the 1099S InfoReq-All form in FAST. This notification should be made as early as possible.

• If after the above notification, no TIN is provided, execute the 1099S Affidavit Failure to Provide TIN document from FAST and have it notarized.

• Report using all 9’s in place of the SSN/TIN.



The I.R.S. does not accept joint tax returns for a Foreign Seller. Therefore, separate tax returns must be filed for Foreign Sellers, including a married couple. Reporting is based on the Foreign Sellers proportional share of the property. Complete 1099-S reporting consistent with the percentages used in FIRPTA Withholding.

IMPORTANT - Follow FIRPTA requirements for withholding! Governmental Entities Government entities are exempt from reporting if they are one of the following types12;

• The United States • A State or the District of Columbia • A possession of the United States (i.e., Guam, U.S. Virgin Islands) • A political subdivision, wholly owned agency or instrumentality of any of the above • A foreign government, a political subdivision thereof • Certain international organizations as defined in I.R.C. 7701 (a)(18)

If any of the above is true, no forms are required. Classify in FAST as “N/A.” Married Couple A transaction with a married couple as the seller is exempt when it's the sale of their principal residence, for $500,000 or less, and assurances (1) through (5) and on Part II of the seller certification form with the 1099S Cert/InfoReq-All-Resid FAST form are all marked "true," AND (6) is marked "true" or "N/A." Obtain from both. If a transaction with a married couple seller is reportable, the Information Request form found within the 1099S Cert/InfoReq-All-Resid package in FAST is required. A married couple are considered one Seller and only one 1099-S will be issued if they hold title as tenants in common, joint tenants, tenants by the entirety, or community property; and have not received an uncontested allocation of gross proceeds between them (i.e., in a legal separation or divorce situation). If the allocation between them is contested, the entire amount may be reported under each spouse’s SSN.13 Individual An individual’s transaction is exempt when the sale of the principal residence, for $250,000 or less, and assurances (1) through (5) and on Part II of the 1099S Cert/InfoReq-All-Resid FAST forms are all marked "true," AND (6) is marked "true" or "N/A”. If the transaction is reportable because of the sales price or it is an investment property, the Information Request form found within the 1099S Cert/InfoReq-All-Resid in FAST is required. Limited Liability Company (LLC) LLCs are reportable unless they select the C=Corporation tax classification on the Information Request form in the 1099S InfoReq-All document in FAST. In this case, classify as “N/A” in FAST. LLCs treated as partnerships for tax reporting purposes will report under the name of the LLC using the EIN. For LLCs treated as a D=Disregarded entity* for tax reporting purposes, report under the sole member’s name provided using the TIN of the sole member (which may be an individual using their SSN or entity, using the



EIN). If the Operating Agreement indicates the sole member is a corporation, then no reporting is required.14 Classify as “N/A” in FAST. In community property states, spouses may be considered a single member. Report only one name and SSN. If two names are shown on the Information Request form confirm which name matches the SSN to ensure the correct name and SSN are used for reporting.

*Generally, a disregarded entity is a business entity that is separate from its owner for some purposes but chooses to be disregarded as separate from the business owner for federal tax purposes. The I.R.S. says, “If a ‘disregarded entity’ is owned by an individual, it is treated as a sole proprietor. If the ‘disregarded entity’ is owned by any other entity, it is treated as a branch or division of its owner."15 Multiple Sellers If you receive forms with no allocations or there is a conflict of the allocation percentages on 1099S InfoReq-Ind form in FAST, report 100% of the entire gross proceeds to each seller (transferor) on separate 1099-S forms. Partnership Partnerships are reportable unless they select C=Corporation tax classification on the Information Request form within the 1099S InfoReq-Ind FAST document. In this case, classify as “N/A” in FAST. If the property is transferred by a partnership (either a Limited Partnership or a General Partnership), there will ONLY be one Information Request form and the report is made using the entity name and EIN of the partnership. Do not prepare a separate 1099-S form for each partner.16 Sole Proprietor A Sole Proprietor, an individual, doing business as (DBA) is reportable. Obtain an Information Request form using the 1099S InfoReq-All document in FAST. Reporting Requirements I.R.S prefers reporting using the SSN of the individual owner, not the EIN of the DBA.17 If reporting under an SSN, show the individual, sole proprietor’s name on the top name line and the DBA name on the second name line. Do NOT consider the form complete if only the DBA name has been entered and a social security number is listed. If the seller insists, we can accept the DBA name using the DBA's EIN. Trusts A Revocable Living Trust transaction may be exempt from reporting. This occurs when assurances (1) through (5) on Part II of the Certification for No Information Reporting form in the FAST 1099S Cert/InfoReq-All-Resid document are all marked "true" AND assurance (6) is marked "true" or "N/A" by the original trustee(s) of the trust. Classify as “N/A” in FAST.



Typically, a Revocable Living Trust is reported under the Trustee name (Smith, Sam) and SSN of the grantor/trustee who created the trust until the death of that party. An Information Request form in the 1099S InfoReq-All FAST document is required if the Certification of No Information Reporting cannot be provided. Testamentary & Irrevocable trusts – a trust created by will (testamentary trust) or a revocable living trust that has become irrevocable due to the death of one or both of the parties who created it should have an EIN. If a revocable living trust is split into two trusts, one of which is revocable and the other irrevocable, then the trustee files taxes under two TINs.

If the Trust has not yet obtained an EIN at closing and is in the process of applying for one, delay the filing of the 1099-S form until the EIN has been received. If an EIN is provided and trust is irrevocable, report the Trust Name (Smith, Sam Smith Irrevocable Trust). First American Title, as Trustee is Seller Report the SSN/EIN of the Trust Beneficiary, not First American Title, as Trustee.

Reporting by Transaction Type

Bulk Volume Transfers Bulk volume transferors are exempt (developers/builders). To qualify for this exemption the developer/builder must transfer 25 properties in a calendar year, and a 1099S Certification of Exempt Status FAST document must be completed/signed annually and retained by the Settlement Agent, preferably in a master file.18 Exchanges A 1031 exchange is a tax-deferred exchange for “like kind” property held for investment or used in a trade or business. Exchanges are reportable. A Settlement Agent is not expected to know if the exchange will qualify per I.R.S. regulations. The amount reported under gross proceeds is the amount of all cash and cash equivalents (also known as the “boot”) received by the exchanger, i.e., cash, notes, and debt relief. The relinquished property transaction must be reported under the Exchanger’s name and SSN/TIN, not the Qualified Intermediary. In FAST on the 1099-S screen, check the box “Property or services were received as part of the consideration.” Delayed Exchange – Report the gross proceeds from the sale of the exchanger’s relinquished property as the contract sales price, because at the time of closing the exchange is not complete. If the exchange is completed, it is the responsibility of the exchanger/taxpayer to report the transaction as an exchange on their tax return.

Simultaneous Exchange – is when the relinquished and replacement properties close simultaneously. You will report the boot (the difference in value between the two properties received as cash) if the replacement property is of lesser value than the relinquished property. 19 If the replacement property is of greater value, you report 0. If the replacement and relinquished properties are of equal property value, you will report 0.



Fractional Exchange There are multiple Sellers in a single file where some are doing an exchange, and others are not. 1099-S reporting must be done manually, as FAST does not allow part of a transaction to be reported as an exchange, and another part not. Involuntary Conversion A sale of real estate under threat or imminence of seizure, requisition, or condemnation is generally a reportable transaction.20 Refinance Transaction Most refinance transactions are exempt. A refinance transaction may be reportable when the borrower is refinancing to buy out another owner. FAST does not provide a method to create a 1099-S record for a buyer/borrower or a file without a sales price. Use FAST document 1099S InfoReq-Ind and follow the manual processing instructions in the 1099-S FAST Process Guide. Short Sale A Short Sale is reported just like a resale transaction, and the report is done on the selling entity. Multiple Properties Two properties being sold in one file may require a 1099-S for each property. There is no method in FAST to change the property address for each 1099S record created. Use FAST document 1099S InfoReq-Ind and follow the manual processing instructions in the 1099-S Reporting in FAST Guide. REO - Real Estate Owned REOs are frequently exempt because the seller is a Corporation or Government Entity. If this is the case, no forms are required. Classify as “N/A” in FAST. If the REO seller is not a corporation (i.e., a trust or National Banking Association or some other entity that is not readily identifiable as a corporation) but provides the 1099S Certification of exempt Status FAST from for reporting, this is acceptable.

If the REO seller is not a corporation and will not sign a 1099S Certificate of Exempt Status, send a 1099S InfoReq-Ind report on each transaction. Contact advisory or underwriting if the lender will not provide the form.

Seller refuses to provide or does not have SSN/TIN If a Seller refuses to provide their SSN/TIN or does not have an SSN/TIN, print and sign the 1099S Affidavit Failure to Provide TIN FAST form.

• Provide the seller the FAST Information Request using the 1099S InfoReq-All form in FAST. This notification should be made as early as possible.

• If after the above notification, no TIN is provided, execute the 1099S Affidavit Failure to Provide



TIN document from FAST and have it notarized. • Process the 1099-S in FAST using all 9’s for the SSN/TIN

Reference 1099 Classifications in FAST

o 1099-S o N/A

exempt per the Seller Certification alternatively, exempt per I.R.S. guidelines

o Certificate of Exempt Status The Seller is usually a builder or an investor who has recently or currently expects to sell or

exchange at least 25 separate properties to 25 separate buyers in a calendar year. Each calendar year, the Seller must sign a Certificate of Exempt Status and that certificate must

be retained for four years. o Verified Not Reportable

For use by management when the FAST 1099-S exception report is reviewed, and it can be verified that the party is not reportable per I.R.S regulations.

Alternative Ways to Gather 1099-S Information Request required information from the seller before closing. Following are acceptable ways to request: 1) Using an I.R.S. form W-9. 2) Providing a written statement similar to the following: “You are required by law to provide (insert

name of the person responsible for filing) with your correct taxpayer identification number. If you do not provide (insert name of the person responsible for filing) with your correct taxpayer identification number, you may be subject to civil or criminal penalties imposed by law.”

The solicitation must contain space for the name, address, and TIN of the transferor and a place to certify under penalties of perjury that the TIN furnished is the correct TIN of the transferor. The certification must read similar to: “Under penalties of perjury, I certify that I am a U.S. person or U.S. resident alien and the number shown on this statement is my correct taxpayer identification number.” (Note that First American’s request form is used with foreign sellers also and contains a similar statement if the seller is foreign.)



Additional 1099-S I.R.S. Information https://www.irs.gov/pub/irs-pdf/i1099s.pdf

Reference

1 26 C.F.R. § 1.6045-4(e)(1)(i) 2 26 C.F.R. § 1.6045-4(e)(3)(i) 3 26 C.F.R. § 1.6045-4(e)(3)(ii) 4 Gross proceeds is discussed in 26 C.F.R. § 1.6045-4(i) 5 26 C.F.R. § 1.6045-4(h) 6 The requirement to indicate that the transferor is a foreign person on 2017 Form 1099-S is not contained in I.R.C. § 6045 or 26 C.F.R. § 1.6045-4. The 2017 1099-S and instructions added the requirement to mark Box 5 if the transferor is a foreign person. 7 26 C.F.R. § 1.6045-4(b)(2)(ii) 8 26 C.F.R. § 1.6045-4(c) 9 26 C.F.R. § 1.6045-4(d) 10 I.R.C. § 6045(e)(5) 11 Rev. Proc. 2007-12, 2007-4 I.R.B. 354, with amendments to include an assurance that there has been no period of nonqualified use (as that term is defined in I.R.C. § 121(b)(5)(C)) after December 31, 2008 and an assurance, as required by IRC § 6045(e)(5)(A)(iii), that the full amount of the gain is excludable under section 121. 12 26 C.F.R. § 1.6045-4(d)(2)(ii)(A) & (B) 13 I.R.C. § 6045(e)(5), Rev. Proc. 2007-12, 2007-4 I.R.B. 354 which can be found at www/irs/gov/pub/irs-irbs/irb07-04.pdf. 14 26 C.F.R. § 1.6045-4(d)(2)(i)(C) 15 26 C.F.R. § 301.7701-3 and discussions with I.R.S. representative 16 I.R.S. Instructions for Form 1099-S 17 I.R.S. General Instructions for Certain Information Returns (Forms 1096, 1097, 1098, 1099, 3921, 3922, 5498, and W-2G) 18 26 C.F.R. § 1.6045-4(d)(1)(iii), (d)(2)(iii) and (d)(3); 19 26 C.F.R. § 1.6045-4(r) Example 4 20 I.R.S. Instructions for Form 1099-S

https://www.irs.gov/pub/irs-pdf/i1099s.pdf

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