Technical topics regarding tax preparation.
20-Mar-2023 11:05am
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Longtime client/friend of husband's got married in 2021. In 2022, they sold wife's condo. Here are the terms:
Condo sold to real estate agent for taking over the loan
Agent upgraded and sold condo
Agent gives Client's wife an additional $15,000.
Shouldn't agent issue 1099-S to client's wife for the $15,000 plus the loan pay off amount?
Thanks
P.S. One may have been issued already, client is going thru her emails to see if the documents were attached.
Cathy
CathysTaxes
20-Mar-2023 11:34am
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Just additional information. Property was transferred with a Quit Claim Deed. The Realtor used a LLC to sell the property and client is a member of the LLC.
Cathy
CathysTaxes
20-Mar-2023 1:07pm
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I thought they were only issued when over max exclusion amounts. I don't see many unless it's a nice sale.
20-Mar-2023 2:58pm
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JR1 wrote:I thought they were only issued when over max exclusion amounts. I don't see many unless it's a nice sale.
Not all homes are owner occupied.
Cathy
CathysTaxes
20-Mar-2023 3:58pm
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I think a 1099-S should have been issued unless it was a sale of a principal residence where certain requirements were met that can eliminate the 1099-S filing requirement.
It's not unusual for a Substitute Form 1099-S to be completed at the time of closing and included with the pages of closing documents rather than prepared and filed the following January. So a careful check of the closing documents is advisable.
20-Mar-2023 4:09pm
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There is a form that is filled out at a closing, with boxes to check that make the sale exempt from 1099-S reporting requirements.
(I learned this when a client sold a rental house last year, and when asked (from the closing attorney) for a 1099-S we stumbled upon the exceptions checklist that the sellers attorney (my client's attorney) had prepared and forged my clients signature, showing it was the sale of a primary residence and thereby exempt from a 1099S filing.)
20-Mar-2023 4:10pm
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Checked documents. There was no closing, just a quit claim deed from client to a LLC where I found out she is also a member. So it seems she should be getting a K1.
Cathy
CathysTaxes
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