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Faith Marshall
 Julie Weaver
Debbie Holscher
John Niernberger

12772 Lodge Drive
Garfield, AR 72732
Phone: 479-359-2000
Fax: 479-359-2025
Faith: faith@beaverlakecountryrealty.com
Julie: julie@beaverlakecountryrealty.com
Debbie: debbie@beaverlakecountryrealty.com
John: john@beaverlakecountryrealty.com 

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Required Reporting to the I.R.S.

Sellers of real property will have certain information regarding the sale reported to the Internal Revenue Service.

This required reporting is a consequence of the Tax Reform Act of 1986; it is intended to encourage taxpayer compliance and aid in audit and enforcement efforts by the I.R.S.

To help you better understand this subject, the Land Title Association has answered some of the questions most commonly asked about Required Reporting to the I.R.S.

Who is required to report to the I.R.S.?

Sellers of real property, under guidelines established by the I.R.S., are required to have their gross proceeds from the sale reported on a Form 1099S. When a settlement agent is used, the I.R.S. makes this agent responsible for the delivery of the information on the Form 1099S.

The settlement agent generally will be the escrow agent or title company; however, it may be an attorney, real estate broker or other person providing settlement services.

What is an I.R.S. Form 1099S, and what will be reported?

The Form 1099S is the reporting form adopted by the I.R.S. for submitting the information required by law.

The information will be transferred onto magnetic media by the settlement agent who will store the information and make the required report to the I.R.S. The settlement agent is also responsible for keeping a master copy of all transactions reported.

In general, information required by the I.R.S. falls into the following categories:

  1. The name, address and taxpayer ID number (social security or tax identification number) of the seller(s)
  2. A general description of the property (in most cases an address)
  3. The closing date of the transaction
  4. The gross proceeds of the transaction (even though gross proceeds do not correspond to taxable income)
  5. Any property involved as part of the transaction other than cash or cash equivalent
  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.

On what type of transactions is a Form 1099S required?

Currently, typical homeowner transactions covered include sales and exchanges of 1-4 family residential properties such as houses, townhouses, and condominiums. Also reportable are sales or exchanges of improved or unimproved land, commercial or industrial buildings, condominiums, stock in a cooperative housing corporation and mobile homes (manufactured homes) affixed to real property.

Specifically excluded from reporting are foreclosures and abandonment of real property and financing or refinancing of properties.

What happens if the seller(s) refuses to provide the taxpayer identification number for the Form 1099S?

The settlement agent is required to request the transferor’s taxpayer identification number(s) (TIN(s)) before the time of closing. You may request a TIN on Form W-9 or use an alternative written request. The IRS has included sample wording of an alternative written request in the instructions for preparation of Form 1099S.

Should the seller fail to provide the identification number and certify its correctness, the settlement agent may choose to:

  1. Delay the closing of the transactions until the information is furnished, or
  2. Complete the transaction and report to the I.R.S. that an attempt was made to obtain the information from the seller.

How is the sale reported when there is more than one seller involved or when multiple sellers do not own equal interests in the property?

Multiple sellers may allocate the gross proceeds among themselves for purposes of reporting. If there is no allocation, an incomplete allocation or conflicting allocations, then the entire gross proceeds will be reported for each seller.

Where can I go for further information on taxation of real property?

The I.R.S. provides free publications that explain the tax aspects of real estate transactions. You may wish to order:

  • Publication #523 “Tax Information on Selling Your Home”
  • Publication #530 “Tax Information for Home Owners”
  • Publication #544 “Sales and Other Dispositions of Assets”
  • Publication #551 “Basis of Assets”

To place your order, phone toll-free (800) 829-3676.

Article by CLTA

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Faith Marshall, Julie Weaver, Debbie Holscher and John Niernberger
12772 Lodge Drive

Garfield, AR 72732
Phone: 479-359-2000
Fax: 479-359-2025
Email Faith: faith@beaverlakecountryrealty.com
Email Julie: julie@beaverlakecountryrealty.com
Email Debbie: debbie@beaverlakecountryrealty.com
Email John:  john@beaverlakecountryrealty.com

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Halloween at Garfield Elementary School

Dear Faith, Julie and John,
    Thanks so much for the treat bags for the kids. They will love them! We are so blessed to have such wonderful support from our community here in Garfield. 
You help us be successful in our jobs in so many ways.
A wonderful piece of info we received yesterday----------
Garfield Elementary School ranked in the top 5% of Elementary schools in the state of Arkansas!
Thanks for all you do!
             
Garfield Staff and Students
Ms. Marshall, I just wanted to say thank you for your support of Garfield Elementary! Your contribution has allowed me to fund the beginnings of a "markerspace" program in our library media center! You made my day!  Sheri Rafferty, Library Specialist
Dear Faith, On behalf of the Garfield Staff, we'd like to thank you for the donation to each of our staff members. You are right, they all spend right out of their pockets for their students. We are so blessed to have people like you in our community to help support our staff and students. Thank you and God Bless You Garfield Staff
Julie, Thank you so much for all your help with our BIG MOVE! I am hoping we love it in Arkansas as much as you do! Blessings! Dylan, Amy, Blake, Owen, and Mia Stroud
Dear Julie, Thank you so much for all your work trying to find us a home! I loved our conversations and hope to see you soon. We closed on the house a couple of weeks ago and love it here! I have saved your real estate cards to hand out! Looking forward to seeing you soon! Robyn and Mark Lorentz
Dear Linda, Thank you so much for helping me sell my Bella Vista property. I can't believe how fast it Happened! I really feel you went the extra mile! Sincerely, Rae Jean Roller
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