By Laura J. Henneberry, SCRP, SGMS-T, Morreale Real Estate Services, Inc. and Joan M. Brady SCRP, GMS, Morreale & Brady, P.C.

The deadline for mailing of the 1099-S form (used in the reporting of real estate sales) is upon us. This document will be arriving soon in mailboxes near and far.

What does this mean? It means you may receive quite a few phone calls about:

• “Why did I get a 1099-S?”
• “Where is my 1099-S?,” and/or
• the ever popular, “Does this mean I owe taxes?”

In the world of relocation, most filing providers will rely on the Certification for No Information Reporting Form to determine whether a 1099-S needs to be filed with the IRS.

How to know if a 1099-S will be filed

• If the employee and/or spouse answer “False” to any question, a 1099-S will be filed.
• Conversely, as long as the employee and/or spouse answer “True” to the questions and at least “N/A” to the last question, no 1099-S will be filed.
• Finally, if the employee and/or spouse fails to return the Certification for No Information Reporting Form, the sale will be reported to the IRS via a 1099-S.

Whether or not a 1099-S is received by the employee does not eliminate the need for the employee to account for the sale of the home on his/her tax return. Nor does the filing of a 1099-S form mean taxes will automatically be owed by the employee. He/she should seek out professional tax counsel to determine exactly what effect the home sale will have on his/her individual tax situation.

If the employee believes an error has been made, it is important to review the Certification for No Information Reporting form and determine the appropriate next steps. Such errors may include:

• Incorrect information listed on the 1099-S form
• If a 1099-S was filed in error,
• If an employee should have received a 1099-S and did not

In the event of any such error, corrections can be made to the 1099-S form, or it can be voided if filed in error.

Some Relocation Management Companies (and service providers of those companies) as well as in-house programs have made the decision to file a 1099-S form for every employee that accepted a buyout or BVO during the previous year.

Remember: the employee must account for the sale of the home whether or not a 1099-S was filed. Therefore, there is no harm in filing a 1099-S even if the employee’s situation would normally negate the necessity for filing.

If you have any questions on the 1099-S filing process, the Certification for No Information Reporting form, or general relocation questions, please contact Morreale Real Estate Services at 630.545.5300 or at info@morrealeres.com.

Note: This article should not be construed as tax/legal advice. Please seek out professional tax and legal advice for your own particular situation.