If you decide to sell your home, you may wonder if you always get a 1099s. The answer is that Federal tax laws require lenders and realtors to submit a form 1099-S, Proceeds of Real Estate Transactions to the IRS and provide you with an official copy. However, this only happens in the event that you don’t satisfy IRS requirements to exclude the gain tax-deductible from the sale on your tax return for income. Here are some important things to keep in mind if you are selling your home and want to avoid receiving a 1099-S:
The 1099-S is typically generated when the net proceeds from your home are greater than $250,000. However, this dollar amount can vary depending on if you file your taxes as a single filer or married couple filing jointly.
To avoid receiving a 1099-S, ensure that you meet the eligibility requirements to exclude the gain from the sale of your home. These requirements include owning and using the home as your primary residence for at least two of the past five years before selling it.
If you do receive a 1099-S, don’t panic. You can still exclude the gain from the sale of your home by properly reporting it on your tax return and demonstrating that you meet the eligibility requirements.