Mobility – October 2019 - 28

WORLDWIDE ERC ® GOVERNMENT AFFAIRS 2019

A Guide to Reporting
Real Estate Sales
By Peter Scott
The reporting of a real estate sale to the IRS is something that comes across the radar screen of nearly
everyone active in the mobility industry in the U.S.
at one time or another. But the rules are complicated.
This column provides a primer.

GENERAL RULES

Section 6045(e) of the U.S. Code requires reporting of
proceeds from real estate transactions. Form 1099-S
is used for this purpose. The form requires the name,
address, and taxpayer identification number for both
the "filer" and the transferor of the property, as well
as the date of closing of the sale, the gross proceeds,
the address or legal description of the real estate
transferred, and an indication as to whether the transferor received property or services (other than cash)
as part of the consideration, and the portion of any
real property tax that is allocable to the purchaser.
Generally, a Form 1099-S must be filed for any sale
or exchange of real estate. No report is necessary,
however, with respect to corporate transferors and
governmental unit transferors. Consequently, in
relocation home purchase programs, the sale from
the employer or relocation management company
to the outside buyer ordinarily does not require
reporting. And, as discussed below, sales below the
$250,000/$500,000 exclusion amounts for capital
gains from sale of a principal residence also are not
required to be reported.
The term "sale or exchange" that triggers the
reporting requirement includes any transaction
properly treated as a sale or exchange for federal
income tax purposes, whether or not the transaction is currently taxable and whether or not it
qualifies as a sale or exchange of real property for
local or state law purposes (e.g., sale using an unrecorded "deed in blank").

28 Mobility | October 2019

The Form 1099-S must be filed with the IRS by
28 February of the year following the year of the
reported real estate transaction. The "recipient copy"
of the completed Form 1099-S must also be furnished
to the transferor before 15 February of the year following the year of the real estate sale.
Some very complicated rules govern who is the
reporting person. In practice, in a relocation home
purchase transaction, it is the employer or relocation management company that generally assumes
responsibility for the required reporting on the sale
from the employee to employer.
The date of closing is the date properly described
as the "settlement date" on a settlement statement
or, in other cases, the earlier of the date on which the
title is transferred or the date on which the economic
burdens and benefits of ownership of real estate shift
from the transferor to the transferee. In relocation
home purchase transactions, this will ordinarily be
the date the employer or relocation management
company takes possession of the house, usually at the
later of the contract date or vacate date.
The term "gross proceeds" generally means the
total cash received, or to be received, by or on behalf
of the transferor, taking into account the stated
principal amount of any obligation to pay cash to
or for the benefit of the transferor in the future. In
computing gross proceeds, the total cash received or
to be received by or on behalf of the transferor is not
reduced by expenses borne by the transferor (such as
sales commissions, advertising, legal fees, etc.). If, as
part of the consideration for the transfer, the transferee either assumes the liability of the transferor or
acquires real estate subject to a liability (whether or
not the transferor is personally liable on the debt), the
amount of the liability is treated as cash received by
the transferor in computing gross proceeds.



Mobility – October 2019

Table of Contents for the Digital Edition of Mobility – October 2019

Mobility – October 2019 - Cover1
Mobility – October 2019 - Cover2
Mobility – October 2019 - 1
Mobility – October 2019 - 2
Mobility – October 2019 - 3
Mobility – October 2019 - 4
Mobility – October 2019 - 5
Mobility – October 2019 - 6
Mobility – October 2019 - 7
Mobility – October 2019 - 8
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Mobility – October 2019 - 100
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Mobility – October 2019 - 108
Mobility – October 2019 - Cover3
Mobility – October 2019 - Cover4
https://www.nxtbook.com/ygsreprints/WERC/mobility-june-2021
https://www.nxtbook.com/ygsreprints/WERC/mobility-may-2021
https://www.nxtbook.com/ygsreprints/WERC/mobility-april-2021
https://www.nxtbook.com/ygsreprints/WERC/mobility-march-2021
https://www.nxtbook.com/ygsreprints/WERC/mobility-february-2021
https://www.nxtbook.com/ygsreprints/WERC/mobility_122020
https://www.nxtbook.com/ygsreprints/WERC/mobility_112020
https://www.nxtbook.com/ygsreprints/WERC/mobility_102020
https://www.nxtbook.com/ygsreprints/WERC/mobility_092020
https://www.nxtbook.com/ygsreprints/WERC/mobility_082020
https://www.nxtbook.com/ygsreprints/WERC/mobility_072020
https://www.nxtbook.com/ygsreprints/WERC/mobility_062020
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https://www.nxtbook.com/ygsreprints/WERC/mobility_012020
https://www.nxtbook.com/ygsreprints/WERC/mobility_122019
https://www.nxtbook.com/ygsreprints/WERC/mobility_112019
https://www.nxtbook.com/ygsreprints/WERC/mobility_102019
https://www.nxtbook.com/ygsreprints/WERC/mobility_092019
https://www.nxtbook.com/ygsreprints/WERC/mobility_082019
https://www.nxtbook.com/ygsreprints/WERC/mobility_072019
https://www.nxtbook.com/ygsreprints/WERC/mobility_062019
https://www.nxtbook.com/ygsreprints/WERC/mobility_052019
https://www.nxtbook.com/ygsreprints/WERC/mobility_042019
https://www.nxtbook.com/ygsreprints/WERC/mobility_032019
https://www.nxtbook.com/ygsreprints/WERC/mobility_022019
https://www.nxtbook.com/ygsreprints/WERC/mobility_012019
https://www.nxtbookmedia.com