You Sold Your Home — Now What's a 1099-S?
It's April 15 — Tax Day — and if you sold a property last year, there's a good chance a 1099-S from your title company is sitting in the stack of documents your CPA is working through right now. If you've been wondering what that form is, where it came from, and why the number on it looks bigger than the check you walked away with at closing, you're not alone.
Here's what that form actually reports, why we're the ones who send it, and what it means for you as a seller.
What We Report (and Why)
When a real estate transaction closes, the title company handling the closing is designated by the IRS as the "person responsible for closing the transaction." That means we're the ones required to file Form 1099-S — Proceeds from Real Estate Transactions — with the IRS and furnish a copy to you, the seller.
The form itself is straightforward. We report the closing date, the gross proceeds from the sale, and the property address. Gross proceeds isn't just the check you walked away with — it includes the full sale price, including any outstanding mortgage balances that were paid off at closing, seller credits, and any other amounts received or credited on your behalf.
That number can catch sellers off guard. You might net $85,000 at closing, but if the sale price was $400,000 and you had a $300,000 mortgage payoff, the 1099-S is going to show $400,000 — not $85,000. The IRS wants to see the total consideration, not just your net proceeds.
Do All Sellers Get One?
Not always. There's an exemption for the sale of a principal residence, but it's not automatic — the seller has to provide a written certification to the title company at or before closing. That certification asks the seller to confirm, under penalties of perjury, that the property was their primary residence, that they meet the ownership and use requirements, and that the full gain qualifies for exclusion. A sample of the certification language can be found in IRS Revenue Procedure 2007-12.
If the seller provides the certification and everything checks out, no 1099-S is required. If they don't — or if any of the assurances don't apply — we file the form. Receiving a 1099-S doesn't necessarily mean you owe taxes — it just means the transaction was reported.
If there are multiple unmarried co-sellers on a transaction, each seller gets their own 1099-S reflecting their share of the proceeds. This comes up more often than you'd think — inherited property, investment partnerships, unmarried co-owners.
What This Means for Your Taxes
The 1099-S is an informational return. It tells the IRS that a real estate transaction occurred and how much was involved. It's then up to you (and your CPA or tax advisor) to report the sale on your tax return and calculate whether you have a taxable gain, a loss, or qualify for an exclusion.
A few things to keep in mind:
Your cost basis matters. The IRS isn't just looking at what you sold the property for — they want to know what you paid for it, what improvements you made, and what your adjusted basis is. That's what determines your actual gain or loss.
Capital improvements reduce your gain. That kitchen remodel or new roof? Keep those receipts. They increase your cost basis, which lowers your taxable gain.
The Bottom Line
A 1099-S isn't a tax bill. It's a reporting document. The title company's job is to accurately report the transaction to the IRS — and your copy ensures you have the same information the IRS has when you file your return.
If you have questions about a 1099-S you've received from a closing, your CPA or tax advisor is the right person to walk you through how it affects your specific situation. And if you're getting ready to sell a property and want to understand the process ahead of time, we're always happy to talk it through.
This post is for general informational purposes only and does not constitute tax or legal advice. Please consult a qualified tax professional regarding your specific circumstances.