Form 1099-S Checklist: 2025 Tax Year
Purpose
Form 1099-S reports gross proceeds from real estate transactions. For the 2025 tax year, filers must continue to comply with longstanding IRS requirements that Copy A be filed only on official, scannable IRS stock. Downloaded and printed copies are not scannable and may result in penalties.
Form 1099-S applies to residential and commercial property transfers, qualifying like-kind exchanges of real property, and settlement-directed closings. Box 5 (foreign person indicator) remains critical for compliance with FIRPTA withholding rules, alerting buyers and the IRS to potential withholding obligations.
Preparation Steps
1. Verify Filer and Transferor TIN Accuracy (2025 Masking Rule)
Confirm that complete taxpayer identification numbers (TINs) are reported on Copy A filed with the IRS. Filers may optionally truncate the transferor’s TIN on Copy B to show only the last four digits for privacy protection. Truncation is permitted but not required.
Mismatched, incomplete, or incorrect TINs may delay IRS matching and trigger deficiency notices or penalties during 2026 processing cycles.
2. Determine Reportable Transaction Status Under 2025 Rules
Verify whether the transaction qualifies as reportable under current Form 1099-S guidance. A transaction is de minimis and not reportable only if the total consideration is less than $600. There is no other general dollar threshold for reporting.
Confirm the property is U.S. real property, including land, buildings, and improvements, and that no specific exception applies. Review whether the transaction involves a Closing Disclosure or HUD-1 Settlement Statement and identify the person responsible for closing the real estate transaction under IRS priority rules.
3. Record Closing Date in Box 1 (Calendar Year 2025)
Enter the actual settlement or closing date shown on the Closing Disclosure. This date determines whether the transaction is reportable on a 2025 Form 1099-S or deferred to 2026.
Closings that occur after December 31, 2025, must be reported on 2026 forms, even if the contract was executed before that date.
4. Calculate and Enter Gross Proceeds in Box 2
Include all cash received, notes receivable by the transferor, assumed notes, and notes paid off at closing. Review loan documentation to ensure mortgage payoff amounts and assumed liabilities are correctly reflected.
Exclude non-cash property or services received, which are indicated separately by checking Box 4. Do not reduce gross proceeds by selling expenses, real estate commissions, legal fees, or mortgage payoff amounts. Report the gross amount only.
5. Complete Property Address or Legal Description (Box 3)
Enter the complete street address, including city, state, and ZIP code, or the official legal description of the property. Use information from the Closing Disclosure or HUD-1 Settlement Statement to ensure accuracy.
This information links reported proceeds to the specific parcel, assisting the IRS in matching.
6. Mark Box 4 if Transferor Received Property or Services
Check Box 4 if the transferor received property, like-kind property, or services as part of the transaction consideration.
If like-kind real property was received, the transferor must file Form 8824. If other non-cash consideration was received, the transferor must report the fair market value on the appropriate form, such as Schedule D, Form 4797, or Form 6252.
7. Mark Box 5 if Transferor Is a Foreign Person
Check Box 5 if the transferor is a nonresident alien, a foreign partnership, a foreign estate, or a foreign trust.
This alerts the IRS and buyer to FIRPTA withholding obligations. The buyer or transferee—not the filer—is responsible for withholding and remitting tax using Form 8288. The filer’s responsibility is limited to verifying foreign status and accurately checking Box 5.
8. Enter Buyer’s Real Estate Tax in Box 6
Report only the portion of real estate taxes charged to the buyer at settlement. This amount is typically shown as a prorated adjustment on the Closing Disclosure.
The transferor uses this amount to adjust deductible real estate taxes or report income if the taxes were previously deducted, in accordance with Publication 523.
9. Prepare Copy A for IRS Filing on Official Stock Only
Do not download and print Copy A from the IRS website. Copy A must be ordered from IRS.gov/EmployerForms or obtained from an approved vendor.
Submitting a non-scannable Copy A may result in penalties under the General Instructions for Certain Information Returns.
10. Furnish Copy B to Transferor by February 17, 2026
Provide Copy B to the transferor by February 17, 2026. This adjusted deadline takes into account weekend and federal holiday considerations.
Include instructions explaining Boxes 4 (property or services received), 5 (foreign person status), and 6 (real estate tax allocation) so that the transferor can properly report the transaction on their tax return.
11. Meet Electronic Filing Requirements
If filing 10 or more information returns in total for 2025 (aggregating all information return types), electronic filing is mandatory.
Filers below the threshold may file on paper or electronically. Paper filers must attach Form 1096 to Copy A and ensure all forms are official scannable copies.
12. Complete Filer Information Block
Enter the filer’s name, street address, city, state, ZIP code, country (if applicable), telephone number, and TIN.
This identifies the closing agent, title company, or settlement company responsible for reporting the transaction. Ensure contact information reflects any changes made during 2025.
Year-Specific IRS Updates and Rule Clarifications (2025)
Copy A Scanability Requirement
Copy A must be filed only on official IRS stock. Downloaded and printed versions are not scannable and may result in penalties. This is a longstanding requirement that remains fully enforceable in 2025.
Like-Kind Exchange Reporting
Box 4 continues to direct transferors to Form 8824 when like-kind real property is received, consistent with post–Tax Cuts and Jobs Act rules limiting Section 1031 exchanges to real property only.
Foreign Person Withholding Clarification
Box 5 confirms foreign person status for FIRPTA purposes. Buyers bear withholding liability; filers do not have joint or secondary liability, but they must accurately report their foreign status.
Real Estate Tax Proration Guidance
Box 6 reflects the buyer’s real estate tax proration. Transferors reconcile this amount under the Publication 523 rules, distinguishing between prepaid taxes and buyer obligations.
Electronic Filing Threshold
The 10-return electronic filing threshold remains in effect for 2025, aggregating all information return types.
Copy B Furnishing Deadline
The Copy B furnishing deadline for 2025 transactions is February 17, 2026, adjusted for weekends and federal holidays.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
