The seller sold the house without the help of a realtor. Instead, an attorney was hired to draw up the paperwork. Isn't the attorney supposed to provide the seller with a 1099? What happens if it's not reported to Uncle Sam?
2007-02-27 14:16:59 · 3 answers · asked by mollyandpenny2001 1 in Business & Finance ➔ Taxes ➔ United States
A Form 1099 isn't necessarily needed. If the seller lived in the home as their prinicipal residence for 2 of the 5 years prior to the sale and the total gain was less than the exclusion amount ($250,000 if Single, $500,000 if Married Filing Jointly) the a Form 1099 isn't required.
The closing agent should have the seller sign a statement of facts on the status of the excludable gain and if it appears that there will be no taxable gain, a Form 1099 probably will not be cut.
Even if a Form 1099 isn't cut, the seller is still legally bound to report the sale and pay any taxes due if they are not entitled to the exclusion.
2007-02-27 14:24:12 · answer #1 · answered by Bostonian In MO 7 · 1⤊ 0⤋
If you lived in the house at least 2 of the last 5 years and the sale price was under $250,000 for a single person or $500,000 for a married couple filing jointly, you do not owe any tax on the sale of the house. Anything over those amounts must be claimed on the federal tax return for the year of the sale and capital gains tax rates must be paid to the US government by April 15th to avoid paying penalties and late fees. We sold our house through a realtor and with an attorney and did not get a 1099 from either. As far as it being reported, that is done by the county, here, when you transfer the deed to the new owner. It is the sellers responsibility to make sure it is included in their income tax forms if they owe any taxes. If you don't include it in your return if you owe taxes on it, there is a good chance you will be audited and may end up paying a lot more in taxes and fees.
2007-02-27 15:05:30 · answer #2 · answered by Nana 3 · 0⤊ 1⤋
The proceeds are reported in the year of sale. If you sold a house in 2006 you should have received a 1099. If the closing was in 2007, you may not receive a 1099 til the end of the year.
If you owned and lived in a home for 2 of the last 5 years, you can exclude up to $250,000 of gain from tax if filing single ($500,000 if married).
2007-02-27 14:22:05 · answer #3 · answered by tma 6 · 0⤊ 2⤋