Publication 924 (12-1992) REPORTING OF REAL ESTATE TRANSACTIONS TO IRS

When real estate is bought or sold, the IRS requires certain information.

Form 1099-S. At the time of the sale or exchange, the seller must give the real estate reporting person his or her:

           1) Complete name.

           2) Address.

           3) Taxpayer identification number (TIN), usually the social

              security number (SSN).

      The real estate reporting person is generally the person responsible for closing the transaction, such as the settlement agent.

The reporting person needs the information to complete Form 1099-S,

He or she must file the form with the IRS for sales or exchanges of:

           1) Improved or unimproved land.

           2) A house, building, or other permanent structure.

           3) A condominium unit.

           4) Stock in a cooperative housing corporation.

For transactions after December 31, 1992, the reporting person must report on Form 1099-S the part of the real property tax paid that is treated as a tax imposed on the buyer. The seller is treated as paying the taxes up to the date of sale, and the buyer is treated as paying the taxes beginning with the date of sale.

The reporting person must give the seller a copy of the Form 1099-S, or a statement containing the same information, and cannot make a separate charge for completing the form or statement.

The reporting requirements do not apply to a real estate transaction not considered a sale or exchange, such as refinancing of real estate.

For other exceptions and more information on reporting real estate transactions, see the Instructions for Forms 1099, 1098, 5498, and W-2G .

Forms 1040 and 1040A. If an individual buys his or her home from another person who finances the sale, new law changes how the buyer reports interest expense and how the seller reports interest income.

The buyer must report the name, address, and SSN of the seller on line 9b of Schedule A (Form 1040).

An individual seller must report the name, address, and SSN of the buyer on line 1 of either Schedule B (Form 1040) or Schedule 1 (Form 1040A).

These new law changes were enacted after the 1992 tax forms were printed. The new law also requires the buyer and seller to exchange their SSNs (or employer identification number (EIN), if applicable). However, the buyer and seller may file their 1992 tax returns even if they do not have the required information by the time they are ready to file. In that case, no penalty will be asserted against the buyer or seller for failing to include on his or her 1992 tax return the other person's SSN or EIN. Be sure to get the required information, however, because it must be reported on tax returns for 1993 and later years.

You may use the lines below to exchange the required information with the other party to your transaction:

      Name: ______________________________________________________

      Address: ___________________________________________________

      SSN: _______________________________________________________

The IRS provides free publications that explain the tax aspects of real estate transactions. Next year when you prepare the tax return that reflects this real estate transaction, you may want to read the following:

          Publication 523

Selling Your Home

Residential Rental Property (Including Rental of Vacation Homes)

Tax Information for First-Time Homeowners

Sales and Other Dispositions of Assets

Basis of Assets

You can order these publications and the

and

by calling our toll-free telephone number 1-800-TAX-FORM (1-800-829-3676). You can also write to the IRS Forms Distribution Center nearest you. Check your tax package for the address.

The publications and instructions are updated annually to reflect changes in tax law. To be sure you get the revision for the tax year that applies to this transaction, please do not order before December.