As a general rule, the person responsible for closing the transaction, as explained in (1) below, is required to submit Form 1099-S. If no one is responsible for the closing of the transaction, the person who must submit Form 1099-S will be explained later to (2). However, you can later designate the person who must submit Form 1099-S in a written agreement, as explained in point (3). The 1099 s certification form applies only to principal residences. They may be referred to in the agreement as the person: who must submit if you are the person responsible for the closing of the transaction (as explained to (1) under Who Must File, the buyer`s lawyer or the des-bler (as described in (1) under Who Must File, previously explained), the title or trust company that is most important for the payment of the gross proceeds, or the mortgage lender (as explained under (2a) Who Must File, previously explained). With this type of language contained in my sales contract, the seller may agree to bear responsibility for the deposit of the 1099-S. This is an important help, because without this language, I would have to fill out the seller`s tax identification number (which many people may be hesitant to provide) fill out the 1099-S and send a copy to BOTH, the IRS and the seller. The designation agreement can be made in writing or in writing and incorporated into the closing communication. It must: Among these parameters, a sales contract seems to be an ideal document that can be written to record ALL the information mentioned above. So in my head… I am mainly dealing with transactions between $600 and $4,999, which are certainly considered „investment properties“ and are made with individuals (… not to mention that if I take the „designation clause“ mentioned above in my sales contract, I only have to work for myself if I am a salesman).
In the case of transactions of which I am the buyer, I can easily include in my sales contract a clause identifying the seller as the supplier responsible for all IRS reports required by obtaining funds related to the transaction. Anyone who signs the agreement must keep it for 4 years. If I have included the „designation clause“ mentioned above in my sales contract, I have in essence no other responsibility, as the seller has agreed that they submit these forms on their own behalf (this is something you would like to have checked by your own paid tax professional). It is interesting to note that the IRS allows you to determine who is needed to file Form 1099-S in a written agreement, in accordance with this excerpt from its instructions… It is also interesting to note that I will not necessarily include this „designation clause“ in all my sales contracts. In many cases (depending on the size of the transaction, the location of the property and the parties involved), the conclusion can be made by a title agency or a closing lawyer – and in these cases, they (the final agents) are responsible for submitting the 1099-S, so it is not always appropriate to delegate this task to each seller. The designation agreement. You can make a written agreement at the close or before closing to determine who should submit Form 1099-S for the transaction. The agreement will identify the person responsible for the bid if that designated person signs the agreement. It is not necessary for all parties to the transaction (or more than one party) to enter into the agreement.
Add the names and addresses of anyone who signed the contract, if I didn`t receive a W-9 from the seller and/or if I didn`t have the „naming clause“ in my purchase contract (or even if I wanted to, but wanted to make the process easier for the seller), I could put together an instruction letter and send it to the seller with all the forms they have to fill out and I`ll fill out the I.R.R.S.