Hello - ALTA:
I was just reading the latest "Title News" and in the article. Key Information for 1099-S Reporting
We say it every year: Where did the time go? It seems one day it's the Fourth of July, then suddenly, it's 1099 season. We realize 1099 reporting is a thankless burden for all title agencies as most are required to report 1099 information to the IRS as well as furnish copies to sellers. It can be an arduous task that takes employee time, while risking penalties from the IRS if reporting is late or done inaccurately. Read on to learn about new requirements, important dates you need to mark on your calendar and how to best handle 1099 reporting.
This is why applying for an ITIN for a foreign seller at the moment of closing is so important, normally foreign sellers do not have a U.S. tax ID, (TIN) some have worked here before and may have a SSN, that's great!, others, took their savings to buy a vacation property and were never in need of an ITIN until they sell.
When the time to issue 1099s comes, it can be a little late to apply for an ITIN, the closing documents serve as supporting documents for an ITIN application, IRS have set very specific criteria to issue a ITINs and will not issue an ITIN because the seller in this case needs to be issued a 1099.
https://www.irs.gov/pub/irs-pdf/iw7.pdf
Other than filing a U.S. tax return, there are only 5 exceptions and you need supporting documents to claim that exception.
A Licensed Certified Acceptance Agent (CAA) can verify your documents (passport) and complete an application so you don't have to struggle with missing information to issue the 1099-S in January!
Let me know if you have questions on this topic, like always we are here to answer your FIRPTA and IRS questions, and glad to do so!
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Mary Enzi CAA
Tax Solutions – FIRPTA Consulting
[email protected]+1 (281) 578-1040
Barker TX
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