1099-S Form

[Yardley CPA]

If the client doesn't recall or indicates they did not receive a 1099-S upon selling a home, what is the downside to indicating you did receive one on their tax return?

[BulldogTom]

Why would you?   I assume you have the closing statement from the client?   So long as you have the relevant data to accurately compute the gain and the §121 exclusion, why would you intentionally answer a question on the return incorrectly?   Am I missing something where the software requires a 1099S to record the sale of a home?

Tom
Longview, TX

[FDNY]

I always ask the client to check to see if a 1099S was issued.  If in doubt I will record the transaction without checking if 1099S was issued.

[Abby Normal]

I don't think I've ever answered that question in ATX. If I don't get a red error, I don't mess with it.

[Yardley CPA]

2 hours ago, BulldogTom said:

Why would you?   I assume you have the closing statement from the client?   So long as you have the relevant data to accurately compute the gain and the §121 exclusion, why would you intentionally answer a question on the return incorrectly?   Am I missing something where the software requires a 1099S to record the sale of a home?

Tom
Longview, TX

I never intended to answer a question incorrectly.  I'm asking what is the downside to doing that?  Assuming the client says they didn't receive one, but actually did...if you check "No", is that an issue?  

I currently have a client who "doesn't remember" receiving one.  I checked no on the return but was just wondering the ramifications if he did in fact receive one.   I assume the IRS is looking to match the sales price to the amount reported on the 1099-S.  

[NECPA in NEBRASKA]

I rarely see any 1099S with any of our home sales in Nebraska or Iowa, but I don't have any clients with super expensive houses.

[BulldogTom]

46 minutes ago, Yardley CPA said:

I never intended to answer a question incorrectly.  I'm asking what is the downside to doing that?  Assuming the client says they didn't receive one, but actually did...if you check "No", is that an issue?  

I currently have a client who "doesn't remember" receiving one.  I checked no on the return but was just wondering the ramifications if he did in fact receive one.   I assume the IRS is looking to match the sales price to the amount reported on the 1099-S.  

Sorry, I guess I understood your question incorrectly ;o)

I don't think there is a downside.   If the IRS gets a 1099S for your client, I would hope they would look at the 1040 and the schedule D before they sent out a letter....but this is the IRS.   At any rate, the response letter would be pretty easy "Taxpayer did not receive the 1099S, please see details of sale related to 1099S on the attached Sch D which was part of the e-filed return."

Tom
Longview, TX

[Lion EA]

I see clients who received the substitute 1099-S with a stack of papers at closing, stuck the whole stack in a drawer, and are sure they never receive it. Of course, I report the sale.

[Gail in Virginia]

I see that a lot too, Lion.  And many times the 1099S is right under the copy of the client's statement answering all the questions that would allow the title company to not prepare a 1099S.