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Real-estate proceeds from sales or exchange of property need to be reported on IRS Form 1099-S. This includes sale of any residential homes, commercial buildings, and land.

Here, we will outline specific 1099-S instructions on how to report the sale and the deadlines you must follow to keep compliant.

Purpose of Filing Form 1099-S (Proceeds from Real Estate Transactions)

When an individual or company (known as transferor) transfers land, buildings, condos, co-ops, or timber ownership, to someone who receives money, property, or services in return, it must be reported to the IRS using Form 1099-S.

Unlike other 1099 forms, 1099-S threshold does not have a minimum reporting amount. Which means you need to report the total gross proceeds received from the transfer of property.

As per IRS rules for 1099-S real-estate proceeds reporting, late filing or under-reporting can lead to penalties of up to $660 per form.

Who Files IRS Form 1099-S?

Form 1099-S is filed any time there’s a sale, exchange, or barter of property.

So, who files 1099-S? It’s someone who has the primary responsibility for closing the transaction!

The individual or company responsible for closing the deal in a real-estate transfer, such as the settlement agent, closing attorney, or title/escrow company listed on the Closing Disclosure, is usually the one who files 1099-S.

But what if no one is designated as the closing agent?

In cases where no one is clearly listed as responsible for the deal, the responsibility passes on to the buyer’s attorney, the seller’s attorney, the title/escrow company handling funds, the mortgage lender, the seller, the real estate broker, and finally the buyer themselves, in that specific order.

However, you can avoid this confusion by getting all the parties to sign a designation agreement at closing with the names of the responsible party who will handle the filing.1099-S must be filed for every sale, exchange, redemption, and barter of land or buildings

When not to File 1099-S

There are different scenarios where you don’t need to file 1099-S.

Transferor or Volume Transferors- Those who meet specific IRS volume criteria

Specific transactions

Note:

Even if the transaction is exempt from filing, you fill have to file 1099-S when a backup withholding gets triggered. This could be due to missing or incorrect TIN.

1099-S Pre-Closing or Pre-Filing Checklist

Before submitting the form to the IRS, use a filer 1099-S checklist to confirm you have all the correct information.

Ready to file 1099-S the easy way?

Whether it’s a home sale or land transfer, Tax1099 helps you e-file Form 1099-S by March 31, 2026.

Start eFiling

Box-by-box Form 1099-S Instructions

Here’s an easy-to-understand box-by-box breakdown on how to file 1099-S.

Box 1: Date of Closing

Report the date of closing or the official date the real estate transaction was closed as shown on the Closing Disclosure.

If there is no Closing Disclosure, the closing date will be the day the title was officially transferred or the day the buyer takes ownership.

Box 2: Gross Proceeds

Report the total gross proceeds received from the sale. The total must include any expenses like agent or legal fees.

Box 3: Address or Legal Description

Report the property’s address (street, city, state, ZIP) or use the legal description (lot, block, or section number) if the address is not available.

Box 4: Property or Services Received

Check this box if the seller did not receive cash, and instead, received property, or services in exchange for ownership.

Box 5: Transferor Is a Foreign Person

Check this box only if the transferor is a foreign person or is not a U.S. citizen.

Box 6. Buyer’s Part of Real Estate Tax

Report the buyer’s share of real estate taxes if the seller paid them in advance. If taxes are paid in arrears, do not use this box.

1099-S Filing Deadlines to Keep in Mind

Filing Type Due Date For 2025 TY (to be filed in 2026)
Delivery Copy B of 1099-S to recipients Feb 2, 2026 (Original: Jan 31)
Paper filing (Only for 10 returns or less) Mar 2, 2026 (Original: Feb 28)
E-Filing (For 10+ returns) Mar 31, 2026
Note:

Form 1099-S due date 2025 TY is on a weekend. So, as per IRS guidelines, the due date will be the next working day.

File 1099-S With This Five-Step E-Filing Workflow

Step 1 Log in or Sign up

Log in to your Tax1099 account or create a new account to start your 1099-S filing process.

Step 2 Upload form data

Upload details about the transferors and transactions using one of these methods:

Step 3Run TIN Match & USPS Address validation

Run real-time TIN match and USPS address validation to verify that the data provided is correct and matches IRS and USPS databases

Step 4Review Summary

Review the 1099-S form and the data from the dashboard. If there are any issues, correct it before transmitting it to the IRS or state agencies.

Step 5Submit 1099-S Form & Distribute Recipient Copy

Submit 1099-S forms directly to the IRS or state agencies through our IRS authorized e-filing platform.

Note:

Do not forget to send recipient copies to the transferors by Feb 2, 2026 (original date: Jan 31)

Mistakes To Avoid When Filing 1099-S

Real-Life 1099-S Reporting Scenarios

Scenario 1: A rental condo was sold for $350,000

If a rental condo was sold for $350,000, a 1099-S needs to be filed and submitted to the IRS by the seller. The gross proceeds must be reported on Box 2.

Scenario 2: A married couple sells their main residence for $475,000

If a married couple sold their main residence for $475,000 and they have a signed main-home certification, there is no requirement to file 1099-S, as per the main-home exclusion rule under Section 121.

Scenario 3: A bank forecloses on a property with a credit bid of $220,000

If a bank forecloses on a property with a credit bid, the bank itself will file a 1099-S and report the gross amount to the IRS. They are also required to send a copy to the former owner of the property.

Scenario 4: A vacant land was exchanged plus $50,000 cash boot

In this scenario, there was property to property exchange along with a $50,000 cash booth Report only the $50,000 cash in Box 2 and check Box 4 to indicate an exchange was done.

Scenario 5: Two LLCs sell a property for $1 million with a 60/40 split

If a property owned by two LLCs was sold for $1million with a 60/40 split between them, you will need to issue separate forms for the LLCs. With LLC A reporting $600,000 and LLC B reporting $400,000, as per their shares.

FAQ’s

Reporting on Form 1099-S is not required if the transferor is a corporation, unless backup withholding was applied.

If a transferor refuses to provide a W-9 form, you can start the 24% backup withholding process on the total gross proceeds and report it.

Yes, if a property has multiple owners, you must issue separate 1099-S forms for each transferor or ownership share.

No, a gift deed is not considered reportable on 1099-S, since there was no sale or exchange involved.

Any tax-related documents including seller certifications must be kept for at least four years in case of IRS audits or inquiries.

To make corrections to a 1099-S form, all you need to do is re-submit a “CORRECTED” 1099-S form via Tax1099 to the IRS to void the previous form. Don’t forget to provide updated copies to the recipients as well.

The IRS offers IRIS, a free software for 1099 form filing. However, the software is entirely manual driven. Using a third-party IRS-approved software like Tax1099 gives you all the features you need for easy 1099-S filing like automated data uploads, TIN and address validations, error checks, and recipient copy distribution.