Some key factors to know about the Internal Revenue Service (IRS) and your sale escrow:
- The IRS requires that settlement agents report the sales they close
- The report is submitted by the filing of Form 1099-S
- Certain transactions do not have to be reported
- No report is submitted for a Corporation Seller
- No report is submitted under certain Residing Seller certifications
- Married = $500,000 (or less) sale
- Single = $250,000 (or less) sale
- The reporting of a transaction does not create a tax obligation
- Any related tax obligation is determined through the income tax filing process
- Form 1099-S is concerned only with the Gross Proceeds (Sales Price)
- The full Sales Price is reported for each Seller unless Sellers furnish an alternate allocation
- The allocation cannot be inferred by a title vesting or distribution of net proceeds
Learn more from our IRS and your Sale Escrow download!
Check out our FTB and your Sale Escrow post for key information regarding the Franchise Tax Board and your Sale Escrow.