Use Form 1096 To Send Forms
Department of the Treasury to the IRS
Internal Revenue Service You must send Copies A of all paper
Forms 1099, 1098, 5498, and W-2G to the
Instructions for Forms 1099, IRS with Form 1096, Annual Summary and
Transmittal of U.S. Information Returns.
Instructions for completing Form 1096 are
1098, 5498, and W-2G contained on Form 1096.
(Including Instructions for Forms 1099-A, 1099-B, Statements to Recipients
1099-C, 1099-DIV, 1099-G, 1099-INT, 1099-MISC, If you are not using the official IRS form
(generally Copy B) to furnish statements to
1099-OID, 1099-PATR, 1099-R, 1099-S, and 5754) recipients, be sure your substitute
Section references are to the Inter nal Revenue Code unless otherwise noted. statements comply with the rules in Pub.
1179, Rules and Specifications for Private
Printing of Substitute Forms 1096, 1098,
Paperwork Reduction Act Notice.—We Form 1098—Seller-Paid Points 1099 Series, 5498, and W-2G. Pub. 1179,
ask for the information on these forms to which is revised annually, is a revenue
carry out the Internal Revenue laws of the For 1995 and later years, you must report procedure that explains the requirements
United States. You are required to give us points paid by the seller on the buyer’s for format and content of substitute
the information. We need it to ensure that Form 1098, Mortgage Interest Statement. statements to recipients. If you are using
you are complying with these laws and to The title of box 2 was changed to “Points a substitute form to furnish information
allow us to figure and collect the right paid on purchase of principal residence.” to recipients, it must comply with the
amount of tax. See Points on page 10. requirements in Pub. 1179.
The time needed to complete and file Filing Forms 1099-A and 1099-C
the following forms will vary depending on Guide to Information Returns
individual circumstances. The estimated Coordinated; Some Boxes
See the chart on pages 32 and 33 for a
average times are: Changed brief summary of information return
Insts. Rather than filing both Forms 1099-A, reporting rules.
begin Acquisition or Abandonment of Secured
on Property, and 1099-C, Cancellation of Need Help?
page Debt, for the same year, you may be Information Reporting Call Site.—The
1098 7 minutes 8 required to file only Form 1099-C. Box 3 IRS operates a centralized call site to
1099-A 10 minutes 11 on Form 1099-A, previously titled “Gross answer questions about reporting on
foreclosure proceeds,” was eliminated, and information returns—Forms 1096, 1098,
1099-B 15 minutes 12 the title of box 4 was changed to “Fair 1099, 5498, W-2, W-2G, and W-3. If you
1099-C 11 minutes 13 market value of property.” On Form have questions related to reporting on any
1099-DIV 14 minutes 14 1099-C, the title of box 6 was changed to of these forms, you may call 304-263-8700
1099-G 11 minutes 15 “Check for bankruptcy,” and a new box 7 (not a toll-free number) Monday through
titled “Fair market value of property” was Friday from 8:30 a.m. to 4:30 p.m. eastern
1099-INT 12 minutes 15 added. See the instructions for both forms, time.
1099-MISC 14 minutes 17 which begin on pages 11 and 13. Bulletin Board Service.—The IRS also
1099-OID 10 minutes 20 operates an electronic bulletin board
1099-PATR 11 minutes 21
Form 1099-R Changes
(IRP-BBS). The IRP-BBS offers changes
1099-R 20 minutes 22 New box 9b, Total employee contributions, and updates that affect information
was added to the 1995 Form 1099-R, reporting. By using your personal computer
1099-S 8 minutes 26
Distributions From Pensions, Annuities, and modem, you can access the IRP-BBS
5498 7 minutes 29 Retirement or Profit-Sharing Plans, IRAs, by dialing 304-263-2749. For more
W-2G 19 minutes 29 Insurance Contracts, etc. See the 1995 information, see Pub. 1220, Specifications
1096 10 minutes (see form) Form 1099-R and the instructions for box for Filing Forms 1098, 1099, 5498 and
9b on page 26. W-2G Magnetically or Electronically.
5754 (see form) 31
Distribution codes A, B, and C, used in Internal Revenue Bulletin.—The Internal
If you have comments concerning the
box 7, were changed to indicate “May be Revenue Bulletin (IRB), published weekly,
accuracy of these time estimates or
eligible....” See page 26. contains newly issued regulations, as well
suggestions for making these forms
simpler, we would be happy to hear from as notices, announcements, legislation,
Form 945—Withholding Tax Return court decisions, and other items of general
you. You can write to the Internal
Revenue Service, Attention: Tax Forms Report backup withholding and withholding interest. You may find this publication
Committee, PC:FP, Washington, DC from gambling winnings, pensions, useful to keep you up to date with current
20224. DO NOT send these forms to this annuities, IRAs, and military retirement on developments. The IRB is sold by the
address. Instead, see Where To File on Form 945, Annual Return of Withheld Superintendent of Documents, U.S.
page 5. Federal Income Tax. File Form 945 for Government Printing Office, Washington,
1995 by January 31, 1996. Generally, any DC 20402, and is available on a
income tax withheld reported on Forms subscription basis. To order the IRB, you
Items You Should Note 1099 or W-2G must be reported on Form can write to the Superintendent of
945. Any income tax withheld reported on Documents or call 202-512-1800 (not a
Form W-2, including withholding on toll-free number).
Changes to Where To File distributions to plan participants from Forms and Publications.—You may order
Some filing sites have changed again. You nonqualified plans, must be reported on forms, instructions, and publications by
may have to file with an Internal Revenue Form 941, Employer’s Quarterly Federal calling 1-800-TAX-FORM
Service Center that is different from the Tax Return. For more information, including (1-800-829-3676).
one you filed with for 1994. Check the the deposit requirements for Form 945, see
addresses listed on page 5 under Where the separate Instructions for Form 945.
To File for your proper filing location.
Cat. No. 11409F
begun backup withholding, begin backup Failure To File Correct Information
Backup Withholding withholding and continue until the TIN is
Returns by the Due Date (Section
2. Notice from the IRS that payee’s TIN
Interest, dividends, rents, royalties,
commissions, nonemployee compensation, is incorrect (“B” notice).—You may elect If you fail to file a correct information return
and certain other payments (including to withhold on any reportable payment by the due date and you cannot show
broker and barter exchange transactions, made to the account(s) subject to backup reasonable cause, you may be subject to a
and certain payments made by fishing boat withholding after receipt of the “B” notice, penalty. The penalty applies if you fail to
operators) may be subject to backup but you must withhold on any reportable file timely, you fail to include all information
withholding at a 31% rate. To be subject payment made to the account more than required to be shown on a return, or you
to backup withholding, a payment must be 30 business days after you received the include incorrect information on a return.
a reportable interest or dividend payment “B” notice. Stop withholding within 30 The penalty also applies if you file on
under section 6049(a), 6042(a), or 6044 (if days after you receive a certified Form W-9 paper when you were required to file on
the patronage dividend is paid in money or (or acceptable substitute). magnetic media, you report an incorrect
qualified check), or an “other” reportable Note: The IRS will furnish a notice to you, TIN or fail to report a TIN, or you fail to file
payment under section 6041, 6041A(a), and you are required to promptly furnish a paper forms that are machine readable.
6045, 6050A, or 6050N. If the payment is copy of such notice, or an acceptable The amount of the penalty is based on
one of these reportable payments, backup substitute, to the payee. For further when you file the correct information
withholding will apply if: information, see Regulations section return. The penalty is:
1. The payee fails to furnish his or her 31.3406(d)-5 and Rev. Proc. 93-37, 1993-2 ● $15 per information return if you
taxpayer identification number (TIN) to you, C.B. 477. correctly file within 30 days (by March 30 if
OR If you receive two incorrect TIN notices the due date is February 28); maximum
2. The IRS notifies you to impose within 3 years for the same account, follow penalty $75,000 per year ($25,000 for small
backup withholding because the payee the procedures in Regulations section businesses, defined later).
furnished an incorrect TIN, OR 31.3406(d)-5(g) and Rev. Proc. 93-37. ● $30 per information return if you
3. You are notified that the payee is 3. Notice from the IRS that payee is correctly file more than 30 days after the
subject to backup withholding (under subject to backup withholding due to due date but by August 1; maximum
section 3406(a)(1)(C)), OR notified payee underreporting.—Start penalty $150,000 per year ($50,000 for
withholding on payments made on the 31st small businesses).
4. For interest and dividend accounts day after the date you receive notification
opened or instruments acquired after 1983, ● $50 per information return if you file after
from the IRS, or you may elect to withhold August 1 or you do not file required
the payee fails to certify to you, under any time before the 31st day. The IRS will
penalties of perjury, that he or she is not information returns; maximum penalty
notify you in writing when to stop $250,000 per year ($100,000 for small
subject to backup withholding under 3 withholding, or the payee may furnish you
above, OR businesses).
a written certification from the IRS stating
5. For interest, dividend, broker, or barter when withholding is to stop. In most Exceptions to the Penalty.—
exchange accounts opened or instruments cases, the stop date will be January 1 of 1. The penalty will not apply to any
acquired after 1983, or broker accounts the year following the year of the notice. failure that you can show was due to
considered inactive in 1983, the payee fails Note: You must notify the payee when reasonable cause and not to willful neglect.
to certify, under penalties of perjury, that withholding under this procedure starts. 2. An inconsequential error or omission
the TIN provided is correct. For further information, see Temporary is not considered a failure to include
Except as explained in 5 above, Regulations section 35a.3406-2. correct information. An inconsequential
reportable “other” payments are subject to 4. Payee failure to certify that he or she error or omission does not prevent or
backup withholding only if 1 or 2 above is not subject to backup withholding.— hinder the IRS from processing the return,
applies. Withhold on reportable interest and from correlating the information required to
Some payees are exempt from backup dividends until certification has been be shown on the return with the
withholding. For a list of types of exempt received. information shown on the payee’s tax
payees and other information, please see return, or from otherwise putting the return
For exceptions to these general timing to its intended use. Errors and omissions
Form W-9, Request for Taxpayer rules, see section 3406(e).
Identification Number and Certification, that are never inconsequential are those
and Instructions for the Requester of Note: For information about backup relating to (a) a TIN, (b) a payee’s surname,
Form W-9. withholding on gambling winnings, see the and (c) any money amounts.
Specific Instructions for Form W-2G for the 3. De Minimis Rule for Corrections.—
Real estate transactions reportable under specific type of gambling winnings later.
section 6045(e) and canceled debts Even though you cannot show reasonable
reportable under section 6050P are not Reporting Backup Withholding.—Backup cause, the penalty for failure to file correct
subject to backup withholding. withholding must be reported on Form information returns will not apply to a
945, Annual Return of Withheld Federal certain number of returns if:
Generally, the period for which the 31% Income Tax. For more information, see the
should be withheld is as follows: a. You filed those information returns,
Instructions for Form 945. Also report
1. Failure to furnish TIN in the manner backup withholding on each Form W-2G, b. Either you failed to include all the
required.—Withhold on payments made 1099-B, DIV, G, INT, MISC, OID, or PATR information required to be shown on a
until the TIN is furnished in the manner used to report the payment. return or you included incorrect
required. Special backup withholding rules information, and
Additional Information.—For more
apply if the payee has applied for a TIN. information about backup withholding, see c. You filed corrections of these
The payee may certify to this on Form W-9 Temporary Regulations sections information returns by August 1.
by noting “Applied For” in the TIN block 35a.9999-1, 2, and 3, and 35a.3406-1 If you meet all the conditions in a
and by signing the form. This form then and 2. through c, the penalty for filing incorrect
becomes an “awaiting-TIN certificate,” and returns (but not for filing late) will not apply
the payee has 60 days to obtain a TIN and to the greater of 10 information returns or
furnish it to you. For information about Penalties 1
⁄2 of 1% of the total number of information
whether backup withholding applies during returns you are required to file for the
the 60-day period, see Temporary calendar year.
The following penalties generally apply to
Regulations section 35a.9999-3, Q/A-59A.
the person required to file information Lower Maximum Penalties for Small
If you do not receive a TIN from the payee
returns. The penalties apply to paper filers Businesses.—For purposes of the lower
within 60 days and you have not already
as well as magnetic media/electronic filers. maximum penalties shown in parentheses
above, you are a small business if your return with no maximum. See section corrections, your corrections can be filed
average annual gross receipts for the 3 6693. on paper because the number of
most recent tax years (or for the period Caution: Congress has considered, and corrections for Form 1098 is less than the
you were in existence, if shorter) ending may consider again, legislation that would 250 filing requirement. However, if you
before the calendar year in which the apply the penalties under sections 6721 were filing 250 or more Form 1098
information returns were due are $5 million and 6722 to Forms 1099-R and 5498. corrections, they would have to be filed on
or less. magnetic media.
Intentional Disregard of Filing How To Get Approval To File on
Requirements.—If any failure to file a Magnetic Media/Electronic Magnetic Media.—File Form 4419,
correct information return is due to Reporting Application for Filing Information Returns
intentional disregard of the filing and Magnetically/Electronically, at least 30
correct information requirements, the days (45 days for some electronic filing)
penalty is at least $100 per information Magnetic media reporting may be required before the due date of the returns. Only
return with no maximum penalty. for filing all information returns discussed one Form 4419 need be filed for all types
in this publication. Acceptable forms of of returns that will be filed on magnetic
Failure To Furnish Correct Payee magnetic media are magnetic tape, tape media. Once you have received approval,
cartridge, 31⁄2-, 51⁄4-, and 8-inch diskette. you need not reapply each year. The IRS
Statements (Section 6722) Pub. 1220, Specifications for Filing Forms will provide a written reply to the applicant
If you fail to provide correct payee 1098, 1099, 5498 and W-2G Magnetically and further instructions at the time of
statements and you cannot show or Electronically, is the revenue procedure approval, usually within 30 days. A
reasonable cause, you may be subject to a for magnetic media and electronic magnetic media reporting package, which
penalty. The penalty applies if you fail to reporting. Different types of payments, includes all the necessary transmittals,
provide the statement by January 31 (see such as interest, dividends, and rents, may labels, and instructions, will be mailed to
part H under General Instructions later), be reported on the same tape or other all approved filers.
you fail to include all information required submission.
to be shown on the statement, or you How To Request a Waiver From Filing
Electronic submissions are filed using on Magnetic Media.—To receive a waiver
include incorrect information on the the Information Reporting Bulletin Board
statement. “Payee statement” has the from the required filing of information
System (IRP-BBS). The IRP-BBS operates returns on magnetic media, submit Form
same meaning as “statement to recipient” 24 hours a day, 7 days a week, and is
as used in part H under General 8508, Request for Waiver From Filing
accessed using your personal computer Information Returns on Magnetic Media,
Instructions. and modem at 304-263-2749. For more requesting an undue hardship waiver from
The penalty is $50 per statement, information, see Pub. 1220. filing on magnetic media. You cannot apply
regardless of when the correct statement Note: Filing electronically will satisfy the for a waiver for more than 1 tax year at a
is furnished, with a maximum of $100,000 magnetic media filing requirements. Any time. If you need a waiver for more than 1
per year. There is no reduction in the reference to magnetic media in these tax year, you must reapply at the
penalty for furnishing a correct statement instructions includes electronic filing. appropriate time each year.
by August 1.
Due Dates.—The due dates for magnetic If a waiver for original returns is
Exception.—An inconsequential error or media reporting are the same as for paper approved, any corrections for the same
omission is not considered a failure to document reporting. types of returns will be covered under the
include correct information. An waiver. However, if you submit original
inconsequential error or omission cannot Extension of Time To File.—For
information about requesting an extension returns on magnetic media but you want to
reasonably be expected to prevent or submit your corrections on paper, a waiver
hinder the payee from timely receiving of time to file, see part B under General
Instructions later. must be approved for the corrections if the
correct information and reporting it on his corrections exceed the 250 filing
or her income tax return or from otherwise Caution: If you file on magnetic media, do
putting the statement to its intended use. not file the same returns on paper.
Errors and omissions that are never Waiver requests generally must be filed
Who Must File on Magnetic Media.—If
inconsequential are those relating to at least 45 days before the due date of the
you are required to file 250 or more
(a) a dollar amount, (b) a payee’s address, returns. However, new brokers and new
information returns, you must file on
(c) the appropriate form for the information barter exchanges may request an undue
magnetic media. The 250-or-more
provided (i.e., whether the form is an hardship waiver by filing Form 8508 by the
requirement applies separately to each
acceptable substitute for the official IRS end of the second month following the
type of form. For example, if you must file
form), and (d) whether the statement was month in which they became a broker or
500 Forms 1098 and 100 Forms 1099-A,
furnished in person or by “statement barter exchange.
you are not required to file Forms 1099-A
mailing,” when required. on magnetic media, but you must file If you are seeking, in a single
Intentional Disregard of Payee Forms 1098 on magnetic media. application, approval for filing returns on
Statement Requirements.—If any failure magnetic media and, if approval is not
Note: Even if you are not required to file
to provide a correct payee statement is granted, a waiver from the magnetic media
on magnetic media, the IRS encourages
due to intentional disregard of the filing requirement, submit both Forms 4419
you to do so. Also, you may file
requirements to furnish a correct payee and 8508.
electronically even if you are not required
statement, the penalty is at least $100 per to file on magnetic media. If you receive an approved waiver, do
payee statement with no maximum not send a copy of it to the service center
The magnetic media filing requirement
penalty. where you file your paper returns. Keep the
does not apply if you apply for and receive
waiver for your records only.
Forms 1099-R and 5498 an undue hardship waiver. See How To
Request a Waiver From Filing on Penalty.—If you are required to file on
The penalties under sections 6721 and Magnetic Media later. magnetic media but fail to do so, and you
6722 do not apply to Form 1099-R, which do not have an approved waiver on record,
Filing Requirement Applies Separately to
is filed under section 6047. The penalty for you may be subject to a penalty of $50 per
Originals and Corrections.—The magnetic
failure to timely file Form 1099-R is $25 per return for failure to file information returns
media filing requirements below apply
day with a maximum of $15,000 per year. on magnetic media unless you establish
separately to original returns and corrected
See section 6652(e). reasonable cause. However, you can file
returns. Originals and corrections are not
The penalties under sections 6721 and up to 250 returns on paper; those returns
aggregated to determine whether you are
6722 do not apply to Form 5498, which is will not be subject to a penalty for failure
required to file on magnetic media. For
filed under section 408(i). The penalty for to file on magnetic media.
example, if you file 400 Forms 1098 on
failure to timely file Form 5498 is $50 per magnetic media and you are making 75 The penalty applies separately to original
returns and corrected returns. See Filing
Requirement Applies Separately to report the data, call 304-263-8700 or your
Originals and Corrections earlier. local IRS office.
6. Report information only in the
appropriate boxes provided on the forms.
Paper Document Reporting Make only one entry in each box unless A. Who Must File.—See the Specific
otherwise indicated in these instructions. Instructions for each form.
If you are required to file 250 or more 7. DO NOT submit any copy other than Nominee/Middleman Returns.—
information returns, see Magnetic Copy A to the IRS. Generally, if you receive a Form 1099 for
Media/Electronic Reporting earlier. amounts that actually belong to another
8. DO NOT use prior year forms unless person, you are considered a nominee
Common Errors.—Please be sure to you are reporting prior year information; do
check your returns to prevent the following recipient. You must file a Form 1099 (the
not use subsequent year forms for the same type of Form 1099 you received) for
common errors: current year. Because forms are “read” by each of the other owners showing the
1. Duplicate filing. Sending the same machine, you MUST use the current year amounts allocable to each. You must also
information to the IRS more than once. form to report current year information. furnish a Form 1099 to each of the other
2. Filer’s name, address, and taxpayer 9. Use the official forms or substitute owners. File Form 1099 with Form 1096,
identification number are not the same on forms that meet the specifications in the Annual Summary and Transmittal of U.S.
Form 1096 and Forms 1099, 1098, 5498, 1995 Pub. 1179, Rules and Specifications Information Returns, with the Internal
or W-2G. for Private Printing of Substitute Forms Revenue Service Center for your area. On
3. Decimal point to show dollars and 1096, 1098, 1099 Series, 5498, and W-2G. each Form 1099, list yourself as the
cents omitted (1000.00). If you submit substitute forms that do not “payer” and the other owner as the
meet the current specifications and that “recipient.” On Form 1096, list yourself as
4. Two or more types of returns
are not machine scannable, you may be the “filer.” A husband or wife is not
submitted with one Form 1096 (e.g., Forms
subject to a penalty of $50 for each return required to file a nominee return to show
1099-INT and 1099-MISC with one Form
for improper format. amounts owned by the other. The
1096). You must submit a separate Form
1096 with each type of document. 10. DO NOT use dollar signs ($) (they nominee, not the original payer, is
are preprinted on the forms), ampersands responsible for filing the subsequent Forms
5. Failure to make an entry in box 1a, 1099.
(&), asterisks (*), commas (,), or other
“Gross dividends and other distributions on
special characters in money amount Mergers.—If two corporations merge and
stock,” on Form 1099-DIV. An amount
boxes. the surviving corporation becomes the
must be entered in box 1a if any amount is
entered in box 1b, 1c, 1d, or 1e. Suggested Format.—Below are owner of all the assets and assumes all the
suggestions that will allow the IRS to liabilities of the absorbed corporation, the
Required Format.—Because paper forms reporting requirements explained in this
process the submitted forms in the most
are read by machines (optical character publication will be met if the surviving
recognition equipment), all Forms 1096, corporation files Forms 1098, 1099, 5498,
1098, 1099, and 5498 must be prepared in 1. Type or machine print data entries
and/or W-2G for reportable payments of
accordance with the following instructions. using 10 pitch (pica) or 12 pitch (elite)
both corporations. See Rev. Rul. 69-556,
If these instructions are not followed, you black type. Use block print, not script
1969-2 C.B. 242.
may be subject to a penalty of $50 per characters. Entries should not be
incorrectly filed document. handwritten. Insert data in the middle of For information on filing Form 1099-INT
the blocks well separated from other for a successor/predecessor corporation,
1. DO NOT CUT OR SEPARATE the see Form 1099-INT later.
printing and guidelines, and take other
forms that are printed two or three to a
measures to guarantee a dark black, clear, Qualified Settlement Funds.—A qualified
sheet (except Form W-2G). Forms 1098,
sharp image. settlement fund must file information
1099, and 5498 are printed two or three to
an 8- by 11-inch sheet. Form 1096 is 2. Do not enter 0 (zero) or “None” in returns as explained in this publication for
printed one to an 8- by 11-inch sheet. money amount boxes when no entry is distributions to claimants if any transferor
These forms must be submitted to the IRS required. Leave the boxes blank unless the to the fund would have been required to
on the 8- by 11-inch sheet. If at least one instructions specifically require that you file if the transferor had made the
form on the page is correctly completed, enter a zero. For example, in some cases, distributions directly to the claimants.
you must submit the entire page. Forms you must enter zero to make corrections. For distributions to transferors, a fund is
W-2G may be separated and submitted as See Corrected Returns later. subject to the information reporting
single forms. 3. You may use the account number requirements of sections 6041 and 6041A
Send the forms to the IRS in a flat box for an account number designation. and may be required to file Form
mailing (not folded). Note: Large envelopes This number must not appear anywhere 1099-MISC. For payments made by the
may require extra postage. else on the form, and this box may not be fund on behalf of a claimant or transferor,
used for any other item. Showing the the fund is subject to these same rules and
2. NO PHOTOCOPIES of any forms are may have to file Form 1099-MISC for the
account number is optional. However, it
acceptable. Official forms are available payment to a third party. For information
may be to your benefit to include the
from your IRS district office or by calling reporting purposes, a payment made by
recipient’s account number on paper
1-800-TAX-FORM (1-800-829-3676). the fund on behalf of a claimant or
documents if your system of records uses
3. DO NOT STAPLE, tear, or tape any of the account number rather than the name, transferor is considered a distribution to
these forms. It will interfere with the IRS’s social security number, or employer the claimant or transferor and is also
ability to scan the documents. identification number for identification subject to information reporting
4. Pinfeed holes on the form are NOT purposes. If you furnish the account requirements.
acceptable. Pinfeed strips outside the 8- number, the IRS will include it in future The same filing requirements,
by 11-inch area must be removed before notices to you about backup withholding. If exceptions, and thresholds apply to
submission, without tearing or ripping the you are using window envelopes to mail qualified settlement funds as apply to any
form. Substitute forms prepared in statements to recipients, and if you are other payer. That is, the fund must
continuous or strip form must be burst and using reduced rate mail, be sure the determine the character of the payment
stripped to conform to the size specified account number does not appear in the (e.g., interest, fixed and determinable
for a single sheet (8 by 11 inches) before window because the Postal Service may income, or gross proceeds from broker
they are filed with the IRS. not accept these for reduced rate mail. transactions) and to whom the payment is
5. DO NOT change the title of any box 4. Do not enter number signs (#); for made (e.g., corporation or individual).
on any form. Do not use a form to report example, enter RT 2, not Rt. #2. For more information, see Regulations
information that is not properly reportable section 1.468B-2(l).
on that form. If you are unsure of where to
Payments to Foreign Persons.—See the (hereafter referred to as “payer”) if the
Illinois, Indiana, Iowa,
Instructions for Forms 1042 and 1042-S, Kansas, Michigan, conditions in items 1 and 2 below are met:
relating to U.S. source income of foreign Minnesota, Missouri, 1. The agent has the authority to sign
persons, and for reporting requirements Kansas City, MO 64999
Nebraska, North Dakota, the form under an agency agreement (oral,
relating to payments of income items to Oklahoma, South Dakota, written, or implied) that is valid under state
foreign persons. Wisconsin
B. When To File.—File Form 1096 and Delaware, District of 2. The agent signs the form and adds
Forms 1098, 1099, or W-2G by February Columbia, Maryland, New
the caption “For: (Name of payer).”
28, 1996. Brokers may file Forms 1096 and Jersey, North Carolina,
Memphis, TN 37501
1099-B anytime after the reporting period Pennsylvania, South Signing of the form by an authorized
they elect to adopt (month, quarter, or
Carolina, Tennessee, agent on behalf of the payer does not
Virginia relieve the payer of the liability for penalties
year), but not later than February 28, 1996.
File Form 1096 and Forms 5498 by May Alaska, California, Colorado, for not filing a correct, complete, and
31, 1996. You will meet the requirement to Hawaii, Idaho, Montana, timely Form 1096 or 4804 and
Ogden, UT 84201
file if the form is properly addressed, Nevada, Oregon, Utah, accompanying returns.
mailed, and postmarked on or before the Forms 1098, 1099, 5498, W-2G, or other
due date. If the regular due date falls on a statements to recipients issued by a
If you have no legal residence, principal
Saturday, Sunday, or legal holiday, file on service bureau or agent should show the
place of business, or principal office or
the next business day. A business day is same payer’s name as shown on the
agency in any Internal Revenue district, file
any day that is not a Saturday, Sunday, or information returns filed with the IRS.
your return with the Internal Revenue
legal holiday. See part H later about Service Center, Cincinnati, OH 45999. For information about the election to
providing Forms 1098, 1099, 5498, and report and deposit backup withholding
W-2G or statements to recipients. Send all information returns filed
under the agent’s TIN and how to prepare
magnetically to IRS-Martinsburg
Reporting period.—Forms 1098, 1099, forms if the election is made, see Rev.
Computing Center, P.O. Box 1359,
and W-2G are used to report amounts Proc. 84-33, 1984-1 C.B. 502 (Pub. 1272).
Martinsburg, WV 25401-1359.
received, paid, credited, or canceled in the Keeping copies.—Generally, keep
case of Form 1099-C, during the calendar D. Filing Returns With the IRS.—The IRS
copies of information returns you filed with
year. Form 5498 is used to report amounts strongly encourages the quality review of
the IRS or have the ability to reconstruct
contributed for the calendar year. data before filing to prevent erroneous
the data for at least 3 years from the due
notices being mailed to payees (or others
Extension.—For paper or magnetic date of the returns. If backup withholding
for whom information is being reported).
media filing, you may request an extension was imposed and for Form 1099-C, keep
of time to file by sending Form 8809, If you must file any Form 1098, 1099, copies of information returns for 4 years.
Request for Extension of Time To File 5498, or W-2G with the IRS, and you are
E. Shipping and Mailing.—If you are
Information Returns, to the address shown filing paper documents, you must send a
sending many forms, you may send them
on the form. You must request the Form 1096, Annual Summary and
in conveniently sized packages. On each
extension by the due date of the returns Transmittal of U.S. Information Returns,
package write your name and TIN, number
for your request to be considered. If your with each type of form as the transmittal
the packages consecutively, and place
request for an extension is approved, you document. You must group the forms by
Form 1096 in package number one. Postal
will have an additional 30 days to file. You form number and submit each group with
regulations require forms and packages to
may request an additional extension. See a separate Form 1096. For example, if you
be sent by First-Class Mail.
Form 8809. For information on extensions file Forms 1098, 1099-A, and 1099-MISC,
complete one Form 1096 to transmit F. Recipient Names and Taxpayer
for providing statements to recipients, see
Forms 1098, another Form 1096 to Identification Numbers.—Taxpayer
transmit Forms 1099-A, and a third Form identification numbers (TINs) are used to
Note: If you are a magnetic media 1096 to transmit Forms 1099-MISC. associate and verify amounts reported to
transmitter requesting extensions of time to Specific instructions for completing Form the IRS with corresponding amounts on
file for more than 50 payers, you must 1096 are included on Form 1096. Also see tax returns. Therefore, it is important that
submit the extension requests magnetically Transmitters, paying agents, etc. later. you furnish correct names, social security
or electronically. For instructions on For information about filing corrected numbers (SSNs) or employer identification
submitting extension requests on magnetic returns, see Corrected Returns later. numbers (EINs) for recipients on the forms
media, see Pub. 1220. or magnetic media sent to the IRS.
If you are filing on magnetic media,
C. Where To File Form 4804, Transmittal of Information Use Form W-9 to request the recipient’s
Returns Reported Magnetically/ TIN. (You may be subject to a penalty for
Caution: NEW FILING LOCATIONS. Check an incorrect or missing TIN. See Penalties
Electronically, must accompany your
the addresses below carefully because you on page 2.) You are required to maintain
may have to file in a service center that is the confidentiality of information obtained
different from the one where you filed last For information on the preparation of
on Form W-9 relating to the taxpayer’s
year. transmittal documents for magnetic media
identity (including SSNs), and you may use
and paper document reporting (Forms
Send all information returns filed on such information only to comply with the
4804 and 1096), see Rev. Proc. 84-24,
paper to the following: tax laws.
1984-1 C.B. 465, or other current revenue
If your principal business, procedure. Note: If the recipient does not provide a
office or agency, or legal Use the following TIN, leave the box for providing the TIN to
If you use paper forms, report payments
residence in the case Internal Revenue the IRS blank on the Form 1098, 1099,
of an individual, is Service Center on the appropriate form, as explained in
5498, or W-2G. See Backup Withholding
located in address the Specific Instructions later.
on page 2. Only one recipient TIN can be
See Pub. 1179 on specifications for entered on the form.
Alabama, Arizona, Florida, private printing of information documents.
The TIN for individual recipients of
Georgia, Louisiana, You may not request special consideration.
Austin, TX 73301 information returns is the social security
Mississippi, New Mexico, Only forms that conform with the official
number. But see the information about
Texas form and the specifications in Pub. 1179
sole proprietors below. For other
Arkansas, Connecticut, recipients, including corporations,
Kentucky, Maine, Transmitters, paying agents, etc.—A partnerships, and estates, it is the EIN.
Massachusetts, New transmitter, service bureau, paying agent,
Cincinnati, OH 45999 SSNs have nine digits separated by two
Hampshire, New York, or disbursing agent (hereafter referred to
Ohio, Rhode Island, hyphens (000-00-0000), and EINs have
Vermont, West Virginia
as “agent”) may sign Form 1096 or 4804
on behalf of any person required to file
nine digits separated by only one hyphen Interest, dividend, and royalty the envelope, you are not required to
(00-0000000). payments.—For payments of dividends or include the legend “Important Tax Return
Show the full name and address in the interest (including original issue discount) Document Enclosed” on the envelope.
section provided on the return. If under section 6042, 6044, or 6049 Substitute forms.—You may furnish to
payments have been made to more than (reported on Forms 1099-DIV, 1099-PATR, the recipient Copy B of the official form, or
one recipient or the account is in more 1099-INT, or 1099-OID), you are required you may use substitute Forms 1099-DIV,
than one name, show as the ONLY name to furnish an official or substitute Form 1099-INT, 1099-OID, and 1099-PATR if
on the first name line the name of the 1099 to a recipient either in person or in a they contain the same language as the
recipient whose TIN is shown on the statement mailing by First-Class Mail. official forms and they comply with the
return. Show the names of any other Payers of royalties are also required to rules in Pub. 1179, relating to substitute
individual recipients in the area below the furnish the statement in person or in a Forms 1099. Applicable box captions and
first line, if desired. Form W-2G filers see statement mailing by First-Class Mail, but numbers must be clearly identified, using
Form 5754 later. the statement need not be the official form. the same wording and numbering as the
Statements may be sent by intraoffice mail official form. However, for Form 1099-INT,
For sole proprietors, show the if you use intraoffice mail to send account
individual’s name on the first name line; on if your substitute does not contain box 3,
information and other correspondence to “Interest on U.S. Savings Bonds and
the second name line, you may enter the the recipient.
business name. You may not enter only Treas. obligations,” you may omit “not
the business name. For the TIN, enter Statement mailing requirements for included in box 3” from the box 1 caption.
either the individual’s SSN or the EIN of Forms 1099-DIV, 1099-INT, 1099-OID, The substitute must show the form number
the business (sole proprietorship). and 1099-PATR, and forms reporting (e.g., Form 1099-INT), form title (e.g.,
royalties only.—The statement mailing Interest Income), and tax year (e.g., 1995).
G. Filer’s Name, Identification Number, requirements apply only to Forms
and Address.—The TIN for filers of If you are using substitutes, the IRS
1099-DIV (except for section 404(k) encourages you to use boxes so that the
information returns, including sole dividends), 1099-INT (except for interest
proprietors and nominees/middlemen, is substitute has the appearance of a form.
reportable under section 6041), 1099-OID, The substitute form must contain the
the Federal EIN. However, sole proprietors 1099-PATR, and royalties reported under
and nominees/middlemen who are not applicable instructions as on the front and
section 6050N (on Form 1099-MISC or back of Copy B of the official form. See
otherwise required to have an EIN should 1099-S). In addition to Forms W-2, W-8,
use their social security numbers. A sole Pub. 1179 for additional requirements. For
W-9, or other 1098, 1099, and 5498 information about substitute Form
proprietor is not required to have an EIN statements, the following enclosures are
unless he or she must file excise or 1099-MISC for royalties, see Other
permitted in a statement mailing: (1) a payments below.
employment tax returns. See Pub. 583, check, (2) a letter explaining why no check
Taxpayers Starting a Business. is enclosed, (3) a statement of the person’s Certain "composite" statements are
The filer’s name and TIN should be account shown on Form 1099, and (4) a permitted. See Pub. 1179.
consistent with the name and number used letter limited to an explanation of the tax Real estate transactions.—You must
on the filer’s other tax returns. The name consequences of the information shown on furnish a statement to the transferor
of the filer’s paying agent or service bureau a recipient statement. containing the same information reported
must not be used in place of the name of A recipient statement may be perforated to the IRS on Form 1099-S. You may use
the filer. to a check with respect to the account Copy B of Form 1099-S or a substitute
To obtain an EIN, file Form SS-4, reported on the recipient statement or to a form that complies with Pub. 1179 and
Application for Employer Identification statement of the recipient’s specific Regulations section 1.6045-4(m). You may
Number, with the IRS. If you do not have account if payments on such account are use a Uniform Settlement Statement (under
your EIN by the time you must file reflected on the recipient’s statement. The RESPA) as the written statement if it is
information returns, enter “Applied For” in check or account statement to which the conformed by including on the statement
any space where the number must be recipient statement is perforated must the legend shown on Form 1099-S and by
entered. contain, in a bold and conspicuous type, designating which information is reported
the legend “Important Tax Return to the IRS on Form 1099-S. You may
Include the room, suite, or other unit furnish the statement to the transferor in
number after the street address. Document Attached.”
person or by mail. Furnish the statement at
H. Statements to Recipients (Borrowers, No additional enclosures, such as or after closing but by January 31 of the
Debtors, Participants, Payers/Borrowers, advertising, promotional material, or a following year. The statement mailing
Transferors, or Winners on Certain quarterly or annual report, are permitted. requirements explained earlier do not apply
Forms).—Be sure that the statements you Even a sentence or two on the yearend to statements to transferors for proceeds
provide to recipients are clear and legible. statement describing new services offered from real estate transactions reported on
by the payer is not permitted. However, Form 1099-S. However, the statement
If you are not using the official IRS form
logos are permitted on the envelope and mailing requirements do apply to
to furnish statements to recipients, see
on any enclosures. statements to transferors for timber
Pub. 1179, Rules and Specifications for
Private Printing of Substitute Forms 1096, For a statement mailing, the legend royalties reportable under section 6050N
1098, 1099 Series, 5498, and W-2G, for “Important Tax Return Document on Form 1099-S.
specific rules about providing “substitute” Enclosed” must appear in a bold and Other payments.—Statements to
statements to recipients. A substitute is conspicuous manner on the outside of the recipients for Forms 1098, 1099-A, 1099-B,
any statement other than Copy B envelope and on each letter, or check or 1099-C, 1099-G, 1099-MISC, 1099-R,
(generally) of the official form. You may account statement that is not perforated to 5498, W-2G, 1099-DIV only for section
develop them yourself or buy them from a the recipient statement. This legend is not 404(k) dividends reportable under section
private printer. However, the substitutes required on any tax form, tax statement, or 6047, or 1099-INT only for interest
must comply with the format and content permitted letter of tax consequences reportable under section 6041 need not
requirements specified in Pub. 1179. included in a statement mailing. Further, be, but can be, a copy of the paper form
you need not pluralize the word filed with the IRS. If you do not use a copy
Different rules apply to furnishing
“document” in the legend simply because of the paper form, the form number and
statements to recipients depending on the
more than one recipient statement is title of your substitute must be the same
type of payment you are reporting and the
enclosed. as the official form. All information required
form you are filing. See the heading below
for the type of payment you are reporting. Note: If you provide recipient statements in to be reported must be numbered and
The headings are (1) Interest, dividend, a “separate mailing” that contains only titled on your substitute in substantially the
and royalty payments; (2) Real estate recipient statements, Forms W-8 and W-9, same manner as on the official form.
transactions; and (3) Other payments. and a letter limited to the explanation of However, if you are reporting a payment as
the tax consequences of the information “Other income” in box 3 of Form
shown on a recipient statement included in 1099-MISC, you may substitute
appropriate explanatory language for the 25401-1359 or to your district director. The furnished to the recipient. When the type
box title. For example, for payments of letter must include (a) your name, (b) your of error requires two returns to make the
accrued wages to a beneficiary of a TIN, (c) your address, (d) type of return, (e) correction, you will mark the
deceased employee required to be reason for delay, and (f) the signature of “CORRECTED” box only on one of the
reported on Form 1099-MISC by Rev. Rul. the payer or authorized agent. Your returns. Refer to the step-by-step
86-109, you might change the title of box request must be postmarked by the date instructions chart that follows to determine
3 to “Beneficiary payments” or something on which the statements are due to be when you should mark the “CORRECTED”
similar. furnished to recipients. If your request for box.
Appropriate instructions to the recipient, an extension is approved, you will be The following chart gives step-by-step
similar to those on the official form, must granted an extra 15 days to furnish the instructions for filing corrected returns for
be provided to aid in the proper reporting recipient statements. three of the most frequently made errors.
of the items on the recipient’s income tax I. Corrected Returns.—If you filed a return Correction of errors may require the
return. For payments reported on Form with the IRS and later discover you made submission of more than one return. Be
1099-B, rather than furnish appropriate an error on it, you must correct it as soon sure to read each section thoroughly.
instructions with each Form 1099-B as possible. For some corrections, you Note: Regulations section 301.6724-1
statement, you may furnish to the recipient must file two returns (Form 1099, 1098, (relating to information return penalties)
one set of instructions for all statements 5498, or W-2G) with Form 1096 and for does not require you to file corrected
required to be furnished to a recipient in a some only one return with Form 1096. See returns for missing or incorrect TINs if you
calendar year. the chart that follows for step-by-step meet the reasonable cause criteria. You are
The statement mailing requirements instructions for correcting three common merely required to include the correct TIN
explained earlier do not apply to errors on paper forms. on the next original return you are required
statements to recipients for information To determine whether you are required to file. However, if you do not meet the
reported on Forms 1098, 1099-A, 1099-B, to submit corrections on magnetic media, reasonable cause criteria, you should file
1099-C, 1099-G, 1099-MISC (except for see Magnetic Media/Electronic corrected returns by August 1 to be
royalties), 1099-R, 5498, W-2G, 1099-DIV Reporting earlier and Pub. 1220. subject to a reduced penalty.
for section 404(k) dividends only, and Follow the step-by-step instructions In addition, even if you meet the
1099-INT for interest reportable under below for the type of error you need to reasonable cause criteria, the IRS
section 6041 only. You may combine the correct. Be sure you complete all encourages you to file corrections for
statements with other reports or financial appropriate information on the returns as incorrect or missing TINs so that the IRS
or commercial notices, or expand them to stated in those instructions. Then file Copy can update the payees’ records.
include other information of interest to the A of the form and Form 1096 with your
recipient. Be sure that all copies of the Internal Revenue Service Center. Please Step-by-Step Instructions for
forms are legible. remember not to cut or separate the forms Filing Corrected Returns on Paper
Certain “composite” statements are that are two or three to a page. Submit the Forms
permitted. See Pub. 1179. entire page even if only one of the forms
on the page is completed. And do not Error (on Original How To File the Corrected
Time for furnishing forms or Return) Return on Paper Forms
statements.—Generally, you must furnish staple the forms to Form 1096. You must
Forms 1098, 1099, and W-2G information use a separate Form 1096 for each type of 1. No payee TIN (SSN STEP 1: Identify incorrect
return you are correcting, but you may use or EIN) or incorrect return submitted.
by January 31, 1996. However, you may payee TIN, or
issue them earlier in some situations, as one Form 1096 for both originals and Form 1098, 1099, 5498, or
incorrect name and
provided by the regulations. For example, corrections of the same type of return. address. This will W-2G:
you may furnish Form 1099-INT to the In addition, you must provide statements require two 1. Prepare a new
separate returns to information return.
recipient on redemption of U.S. Savings to recipients showing the corrections as
make the 2. Enter an “X” in the
Bonds at the time of redemption. Brokers soon as possible. “CORRECTED” box at
and barter exchanges may furnish Form Note: If you fail to file correct information Read and follow all the top of the form.
1099-B anytime but not later than January returns or furnish a correct payee instructions for 3. Enter the payer,
31. statement, you may be subject to a both Steps 1 and recipient, and account
Trustees or issuers of IRAs or SEPs penalty. See Failure To File Correct 2. number information
exactly as it appeared
must furnish participants with a statement Information Returns by the Due Date on the original
of the value of the participant’s account by (Section 6721) on page 2 and Failure To incorrect return;
January 31, 1996. IRA contribution Furnish Correct Payee Statements HOWEVER, enter “0”
information must be furnished to the (Section 6722) on page 3. (zero) for all money
participant by May 31, 1996. amounts.
On all Forms 1098, 1099, and 5498, a
STEP 2: Report correct
For real estate transactions, you may box is provided for the account number. If information.
furnish the statement to the transferor at the account number was provided on the
A. Form 1098, 1099, 5498,
closing or by mail on or before January 31, original return, use this number on the
1996. corrected return to help identify the 1. Prepare a new
Filers of Form 1099-G who report state appropriate incorrect return filed when information return.
or local income tax refunds, credits, or more than one return was filed for a 2. Do NOT enter an “X”
offsets must furnish the statements to particular individual. The account number in the “CORRECTED”
recipients during January 1996. may be a checking account number, box at the top of the
savings account number, serial number, or form. Submit the new
You will meet the requirement to furnish any other number assigned to the payee return as though it
the statement if it is properly addressed, by the filer that is unique and will was an original.
mailed, and postmarked on or before the distinguish the specific account. This 3. Include all the correct
due date. If the regular due date falls on a information on the
number must appear on both the original form including the
Saturday, Sunday, or legal holiday, the due and corrected returns to properly identify correct TIN and name
date is the next business day. A business and process the correction. and address.
day is any day that is not a Saturday, B. Form 1096:
Sunday, or legal holiday. CORRECTED box.—Enter an “X” in the
“CORRECTED” box on Copy A only when 1. Prepare a new
Extension.—You may request an you are correcting a form you previously transmittal Form 1096.
extension of time to provide the submitted to the IRS. Enter an “X” in the 2. Enter the words “Filed
statements to recipients by sending a letter To Correct TIN, Name,
“CORRECTED” box on the copies you give and/or Address” in the
to IRS-Martinsburg Computing Center, to the recipient (generally, Copy B) only bottom margin of the
P.O. Box 1359, Martinsburg, WV when you are correcting a form previously form.
Error (on Original How To File the Corrected VOID box.—If a completed or partially distributions should be reported on Form
Return) Return on Paper Forms completed Form 1098, 1099, or 5498 is 1099-R.
3. Provide all requested incorrect and you want to void it before
information on the submission to the IRS, enter an “X” in the
form as it applies to “VOID” box at the top of the form. For Specific Instructions
the returns prepared example, if you make an error while typing
in Steps 1 and 2. or printing a form, you should void it. The
4. File Form 1096 and If a distribution includes noncash property,
return will then be disregarded during show the fair market value of the property
Copies A of the
returns with the
processing by the IRS. Go to the next form at the time of payment.
appropriate service on the page, or to another page, and enter
the correct information; but do not mark Although, generally, you are not required
5. Do NOT include the “CORRECTED” box. Please remember to report payments smaller than the
copies of the original not to cut or separate the forms that are minimum described for each form, you
return that was filed two or three to a page. Submit the entire may prefer, for economy and your own
incorrectly. page even if only one of the forms on the convenience, to file Copies A for all
page is a good return. payments. The IRS encourages this.
2. Incorrect money A. Form 1098, 1099, 5498,
amount(s) or or W-2G: K. Other Information Returns.—The
incorrect address. 1. Prepare a new income information you report on the Form 1098
Follow these information return. following returns must not be repeated on
instructions if you 2. Enter an “X” in the the returns discussed in the Specific
filed a return when “CORRECTED” box at Instructions in this publication: Use Form 1098, Mortgage Interest
one should not the top of the form. Statement, to report mortgage interest
have been filed. 3. Enter the payer,
1. Form W-2 reporting wages and other (including points, defined later) of $600 or
This error requires recipient, and account employee compensation. more received by you during the year in
only one return to number information
make the 2. Forms 1042-S and 1000 reporting the course of your trade or business from
exactly as it appeared income. an individual, including a sole proprietor.
correction. (Follow on the original
the instructions incorrect return; 3. Form 2439 reporting undistributed The $600 threshold applies separately to
under Error 1, HOWEVER, enter all long-term capital gains of a regulated each mortgage; thus, file a separate Form
instead of these correct money 1098 for each mortgage. You may, at your
instructions, if you
amounts in the option, file Form 1098 to report mortgage
must correct an correct boxes as they 4. Schedule K-1 of Form 1065 reporting interest of less than $600, but you are
address AND a should have appeared distributive shares to members of a
name or TIN.) subject to the rules in these instructions.
on the original return, partnership.
and enter the If an overpayment of interest on an
5. Schedule K-1 of Form 1041 reporting adjustable rate mortgage (ARM) or other
address. distributions to beneficiaries of trusts or mortgage was made in a prior year and
B. Form 1096: estates. you refund (or credit) such overpayment,
1. Follow the instructions 6. Schedule K-1 of Form 1120S you may have to file Form 1098 to report
under Error 1, Step reporting distributive shares to the refund (or credit) of the overpayment.
2-B, but ignore item shareholders of S corporations.
See Reimbursement of Overpaid Interest
2. File Form 1096 and 7. Schedule K of Form 1120-IC-DISC later.
Copy A of the return reporting actual and constructive Exceptions.—You need not file Form 1098
with the appropriate distributions to shareholders and deferred for interest received from a corporation,
service center. DISC income. partnership, trust, estate, association, or
3. Do NOT include a company (other than a sole proprietor)
copy of the original 8. Schedule Q of Form 1066 reporting
return that was filed income from a REMIC to a residual interest even though an individual is a coborrower
incorrectly. holder. and all the trustees, beneficiaries, partners,
members, or shareholders of the payer of
L. Payments to Corporations and
3. Original return was STEP 1: Identify incorrect record are individuals.
Partnerships.—Reporting generally is not
filed using the return submitted. Mortgage Defined.—An obligation
WRONG type of required for payments to corporations
Form 1098, 1099, 5498, or incurred after 1987 is a mortgage if real
return. For W-2G: except in the case of (1) medical payments
example, a Form (Form 1099-MISC), (2) withheld Federal property that is located inside or outside
Follow the instructions
1099-DIV was filed under Error 1, Step 1, income tax or foreign tax, (3) barter the United States secures all or part of the
when a Form using the same type of exchange transactions (Form 1099-B), obligation, even though the interest
1099-INT should form that was used (4) substitute payments in lieu of dividends recipient classifies the obligation as other
have been filed. initially. than a mortgage, for example, as a
This will require
and tax-exempt interest (Form 1099-MISC),
STEP 2: Report correct (5) interest or original issue discount paid commercial loan.
information on the correct
returns to make the or accrued to a regular interest holder of a An obligation incurred after 1984 but
type of return.
A. Form 1098, 1099, 5498,
REMIC (Form 1099-INT or 1099-OID), before 1988 is a mortgage only if secured
Read and follow all (6) acquisitions or abandonments of primarily by real property.
instructions for secured property (Form 1099-A), and
both Steps 1 and Follow the instructions An obligation in existence on December
under Error 1, Step 2–A, (7) cancellation of debt (Form 1099-C). For 31, 1984, is not a mortgage if, at the time
using the proper type of example, reporting is not required for the obligation was incurred, the interest
form. payments of architectural fees to
B. Form 1096:
recipient reasonably classified the
corporations. obligation as other than a mortgage, real
Follow the instructions
under Error 1, Step 2–B,
However, reporting generally is required property loan, real estate loan, or other
except enter the words for payments to partnerships. For example, similar type of obligation. For example, if
“Filed To Correct payments of $600 or more made in the an obligation incurred in 1983 was secured
Document Type” in the course of your trade or business to a law by real property, but the interest recipient
bottom margin of Form firm that is a partnership are reportable on reasonably classified the obligation as a
1096. Form 1099-MISC. commercial loan because the proceeds
J. Void Returns.—An “X” in the “VOID” M. Earnings on an IRA or SEP.— were used to finance the borrower’s
box will not correct a previously filed Generally, any income with respect to an business, the obligation is not considered
return. See part I above for instructions for IRA or SEP, such as interest or dividends, a mortgage for purposes of this reporting
making corrections. is not reported on Forms 1099. But requirement. However, if over half of the
obligations in a class established by the
interest recipient are primarily secured by
real property, it is not reasonable to Collection agents.—Generally, if you designee. A designee may report points on
classify those obligations as other than receive reportable interest payments (other Form 1098 (as having been paid directly by
mortgages for purposes of this reporting than points) on behalf of someone else and the payer of record) only if the designation
requirement. you are the first person to receive the agreement contains the designator’s
Real property includes a manufactured interest, for example, if you are a servicing representation that it did not lend such
home with a minimum living space of 400 bank collecting payments for a lender, you amount to the payer of record as part of
square feet and a minimum width of more must file this form and enter your name, the overall transaction. The agreement
than 102 inches of a kind customarily used address, and TIN in the recipient entity need not be filed with the IRS, but the
at a fixed location, including certain mobile area. You must file this form even though designator must keep a copy of it for 4
homes. See section 25(e)(10). you do not include the interest received in years after the close of the year in which
your income but you merely transfer it to the loan is made.
Lines of credit and credit card another person. If you wish, you may enter
obligations.—Interest (other than points) A designated qualified person is subject
the name of the person for whom you to any applicable penalties as if it were the
received on any mortgage that is in the collected the interest in box 4. The person
form of a line of credit or credit card interest recipient. Thus, a designator is
for whom you collected the interest need relieved from liability for any applicable
obligation is reportable regardless of how not file Form 1098.
you classified the obligation. A borrower penalties.
incurs a line of credit or credit card However, there is an exception to this Reimbursement of Overpaid Interest.—
obligation when the borrower first has the rule for any period that (1) the first person You are required to report reimbursements
right to borrow against the line of credit or to receive or collect the interest does not of overpaid interest aggregating $600 or
credit card, whether or not the borrower have the information needed to report on more to a payer of record on Form 1098.
actually borrows an amount at that time. Form 1098 and (2) the person for whom You are not required to report
the interest is received or collected would reimbursements of overpaid interest
Who Must File.—File this form if you are receive the interest in its trade or business
engaged in a trade or business and, in the aggregating less than $600 unless you are
if the interest were paid directly to such otherwise required to file Form 1098. That
course of such trade or business, you person. If (1) and (2) apply, the person on
receive from an individual $600 or more of is, if you did not receive at least $600 of
whose behalf the interest is received or mortgage interest during the year of
mortgage interest on any one mortgage collected is required to report on Form
during the calendar year. You are not reimbursement from the person to whom
1098. If interest is received or collected on you made the reimbursement, you are not
required to file this form if the interest is behalf of another person other than an
not received in the course of your trade or required to file Form 1098 merely to report
individual, such person is presumed to the reimbursement. However, you may
business. For example, you hold the receive the interest in a trade or business.
mortgage on your former personal report any reimbursement of overpaid
residence. The buyer makes mortgage Foreign interest recipient.—If you are interest that you are not otherwise required
payments to you. You are not required to not a U.S. person, you must file Form 1098 to report, but you are subject to the rules
file Form 1098. if the interest is received in the United in these instructions.
States. A U.S. person is a citizen or The reimbursement must be reported on
If you receive $600 or more of mortgage resident of the United States, a domestic
interest in the course of your trade or Form 1098 for the year in which the
partnership or corporation, or a nonforeign reimbursement is made. No change should
business, you are subject to the estate or trust. If the interest is received
requirement to file Form 1098, even if you be made to the prior year Form 1098
outside the United States, you must file because of this reimbursement. Report the
are not in the business of lending money. Form 1098 if (1) you are a controlled
For example, if you are a real estate total reimbursement even if it is for
foreign corporation or (2) at least 50% of overpayments made in more than 1 year.
developer and you provide financing to an your gross income from all sources for the
individual to buy a home in your 3-year period ending with the close of the To be reportable, the reimbursement
subdivision, and that home is security for tax year preceding the receipt of interest must be a refund or credit of mortgage
the financing, you are subject to this (or for such part of the period as you were interest received in a prior year that was
reporting requirement. However, if you are in existence) was effectively connected required to be reported for that prior year
a physician not engaged in any other with the conduct of a trade or business in by any interest recipient on Form 1098.
business and you lend money to an the United States. Only the person who makes the
individual to buy your home, you are not reimbursement is required to report it on
subject to this reporting requirement Designation agreement.—An interest Form 1098. For example, if you bought a
because you did not receive the interest in recipient, including a recipient of points, mortgage on which interest was overpaid
the course of your trade or business as a can designate a qualified person to file in a prior year, you made a reimbursement
physician. Form 1098, to provide a statement to the of the overpaid interest, and the previous
payer of record, and to provide the Rule of mortgage holder was required to report
A governmental unit (or any subsidiary 78s notice. A qualified person is either
agency) receiving mortgage interest from mortgage interest on Form 1098 in the
(1) a trade or business in which the interest prior year, you must file Form 1098 to
an individual of $600 or more must file this recipient is under common control as
form. report the reimbursement because you are
specified in Regulations section 1.414(c)-2 the one making the reimbursement.
For information about who must file to or (2) a designee, named by the lender of
report points, see Points later. For record or by a qualified person, who either If you reimburse interest in the same
information about who must file to report was involved in the original loan year it is overpaid, do not report the
reimbursements of overpaid interest, see transaction or is a subsequent purchaser overpayment on Form 1098 as interest
Reimbursement of Overpaid Interest of the loan. A lender of record is the received during the year or as a
later. person who, at the time the loan is made, reimbursement of overpaid interest. For
is named as the lender on the loan example, if the borrower paid $5,000 and
Cooperative housing corporation.—A you reimbursed $500 of that amount in
cooperative housing corporation is an documents and whose right to receive
payment from the payer of record is 1995, $4,500 should appear in box 1 as
interest recipient and must file Form 1098 interest paid by the borrower. The $500
to report an amount received from its secured by the payer of record’s principal
residence. Even if the lender of record reimbursement must not appear in box 3.
tenant-stockholders that represents the
tenant-stockholders’ proportionate share of intends to sell or otherwise transfer the Example.—In 1993, you received $5,000
interest described in section 216(a)(2). This loan to a third party after the close of the of mortgage interest from the
rule applies only to tenant-stockholders transaction, such intention does not payer/borrower and reported that amount
who are individuals and from whom the change who is the lender of record. on Form 1098 for 1993. In 1995, you
cooperative has received at least $600 of The agreement must be in writing, determined that interest due on the
interest during the year. (See the Note identify the mortgage(s) and calendar years mortgage for 1993 was $4,500, and the
under Box 1.) for which the qualified person is to report, payer/borrower had overpaid $500. You
and be signed by the designator and the refunded the $500 overpayment to the
payer/borrower in 1995. If you received you to draw on that escrow account to pay 1. They are clearly designated on the
$600 or more of interest on the mortgage interest on the borrower’s mortgage, do Uniform Settlement Statement (Form
from the payer/borrower in 1995, you must not report in box 1 the interest received HUD-1) as points; for example, “loan
report the $500 refund in box 3 of the from that escrow account. As another origination fee” (including amounts for VA
1995 Form 1098. No change to the 1993 example, do not report in box 1 any lump and FHA loans), “loan discount,” “discount
Form 1098 is required. If, instead of sum paid by a real estate developer to pay points,” or “points.”
refunding the $500 overpayment, you interest on a purchaser’s-borrower’s 2. They are computed as a percentage
credited the payer/borrower’s 1995 mortgage. However, if you wish, you may of the stated principal loan amount.
mortgage interest payments due, $500 is use box 4 to report to the payer of record
still shown in box 3, and the interest any interest paid by the seller. See Points 3. They are charged under an
received from the payer/borrower in 1995 later for information about reporting established business practice of charging
shown in box 1 must include the $500 seller-paid points in box 2. points in the area where the loan was
credit. issued and do not exceed the amount
Rule of 78s Method of Accounting.—If generally charged in that area.
Interest on reimbursement.—A you are permitted by Rev. Proc. 83-40,
financial institution (or its middleman) that 1983-1 C.B. 774, or any other revenue 4. They are paid for the acquisition of
pays interest of $10 or more on the procedure, to use the Rule of 78s method the payer of record’s principal
reimbursement must report that interest to calculate interest earned with respect to residence, and the loan is secured by that
(under section 6049) on Form 1099-INT, a transaction, you may report interest residence. You may rely on a signed
Interest Income. Others that pay interest of earned under the Rule of 78s method on written statement from the payer of record
$600 or more on the reimbursement must that transaction as interest received from that states whether the proceeds of the
report that interest (under section 6041) on the borrower in a calendar year. In this loan are for the purchase of the payer of
Form 1099-INT. Do not include such case, you must notify borrowers that the record’s principal residence.
interest on Form 1098. Rule of 78s method was used to calculate 5. They are paid directly by the payer
Nonresident Alien Interest Payer.—You interest received and that the borrowers of record.
must file Form 1098 to report interest paid may not deduct the amount reported Points are paid directly if:
by a nonresident alien only if all or part of unless the borrowers are also properly
(a) The payer of record provides funds
the security for the mortgage is real using the Rule of 78s method to determine
that were not borrowed from the lender of
property located in the United States. interest deductions. The notification must
record for this purpose as part of the
also state that the Rule of 78s method may
Payer of Record.—The payer of record is overall transaction. The funds may include
be used only in the case of a self-
the individual carried on your books and down payments, escrow deposits, earnest
amortizing consumer loan that requires
records as the principal borrower. If your money applied at closing, and other funds
level payments, at regular intervals (at least
books and records do not indicate which actually paid over by the payer of record at
annually), over a period not in excess of 5
borrower is the principal borrower, you or before closing. OR
years (with no balloon payment at the end
must designate one. of the loan term), and only when the loan (b) The seller pays points on behalf of
If you permit a subsequent purchaser of agreement provides for use of the Rule of the payer of record. Points paid by the
the property to assume the loan without 78s method to determine interest earned seller to the interest recipient on behalf of
releasing the first purchaser from personal (see Rev. Proc. 83-40 and Rev. Rul. 83-84, the payer of record are treated as paid to
liability, the subsequent purchaser is the 1983-1 C.B. 97). The notice must be the payer of record and then paid directly
payer of record. Such subsequent furnished to the payer of record on or with by the payer of record to the interest
purchaser’s name, address, and TIN must the statement of the interest received. recipient.
appear on Form 1098. Points.—You must report certain points Report points paid under (a) and (b) above
Multiple Borrowers.—Even though there paid for the purchase of the payer of on the payer of record’s Form 1098 in
may be more than one borrower on the record’s principal residence on Form 1098. box 2.
mortgage, you are required to prepare You must report points if the points, plus Do not report on Form 1098 points paid
Form 1098 only for the payer of record, other interest on the mortgage, are $600 or (1) for loans to improve a principal
and only if such payer of record is an more. For example, if a borrower pays residence, (2) for loans to purchase or
individual, showing the total interest points of $300 and other mortgage interest improve a residence that is not the payer
received on the mortgage. Even if an of $300, the lender has received $600 of of record’s principal residence, such as a
individual is a coborrower, no Form 1098 is mortgage interest and must file Form 1098. second home, vacation, investment, or
required unless the payer of record is also Who must report points.—The lender of trade or business property, (3) for a home
an individual. record or a qualified person must file Form equity or line of credit loan, even if secured
Payments by Third Party.—Report all 1098 to report all points paid by the payer by the principal residence, (4) for a
interest received on the mortgage as of record in connection with the purchase refinancing (but see Construction loans
received from the borrower, except as of the principal residence. If a designation below), including a loan to refinance a debt
explained under Seller Payments below. agreement is in effect for a mortgage, only owed by the borrower under a land
For example, if the borrower’s mother the person designated in the agreement contract, a contract for deed, or similar
makes payments on the mortgage, the must file Form 1098 to report all points on forms of seller financing, (5) in lieu of items
interest received from the mother is that mortgage. See Designation ordinarily stated separately on the Form
reportable on Form 1098 as received from agreement earlier. HUD-1, such as appraisal fees, inspection
the borrower. fees, title fees, attorney fees, and property
Amounts received directly or indirectly
However, do not report mortgage taxes, and (6) to acquire a principal
by a mortgage broker are treated as points
interest received from any governmental residence to the extent the points are
to the same extent they would be treated
unit (or any subsidiary agency). For allocable to an amount of principal in
as points if paid to and retained by the
example, do not report any interest excess of $1 million.
lender of record. The lender of record must
received as housing assistance payments report those points paid to a mortgage Construction loans.—Points paid on a
from the Department of Housing and broker. loan to construct a residence (construction
Urban Development (HUD) on mortgages loan) or to refinance a loan incurred to
Report the total points on Form 1098 for
insured under section 235 of the National construct a residence are reportable on
the year of closing regardless of the
Housing Act. Form 1098 if they:
accounting method you use to report the
Seller Payments.—Do not report in box 1 points as income for Federal income tax 1. Are clearly designated on the loan
of Form 1098 any interest paid by a seller purposes. documents as points incurred in
on a purchaser’s-borrower’s mortgage, connection with the loan, such as loan
Reportable points.—Report on Form
such as on a “buy-down” mortgage. For origination fees, loan discount, discount
1098 points that meet all the following
example, if a real estate developer points, or points,
deposits an amount in escrow and tells
2. Are computed as a percentage of the includes prepayment penalties and late furnished the lender a statement, under
stated principal loan amount, charges unless the late charges are for a penalties of perjury, that the borrower is an
3. Conform to an established business specific mortgage service. exempt foreign person (unless the lender
practice of charging points in the area Note: A cooperative housing corporation knows that the statement is false).
where the loan is issued and do not that receives any cash part of a patronage Who Must File.—In addition to the general
exceed the amount generally charged in dividend from the National Consumer rule specified above, the following rules
the area, Cooperative Bank must reduce the interest apply.
4. Are paid in connection with a loan to be reported on each If there are multiple owners of
incurred by the payer of record to tenant-stockholder’s Form 1098 by a undivided interests in a single loan, such
construct (or refinance construction of) a proportionate amount of the cash payment as is the case in pools, fixed investment
residence that is to be used, when in the year the cooperative receives the trusts, or other similar arrangements, the
completed, as the principal residence of cash payment. See Rev. Proc. 94-40, trustee, record owner, or person acting in
the payer of record, 1994-1 C.B. 711. a similar capacity must file Form 1099-A
5. Are paid directly by the payer of Box 2.—Enter points paid on the purchase on behalf of all the owners of beneficial
record, and of the payer of record’s principal interests or participations. In this case,
residence. For an explanation of reportable only one form for each borrower must be
6. Are not allocable to an amount of points, see Points earlier. filed on behalf of all owners with respect to
principal in excess of $1 million. the loan. Similarly, in the case of bond
Box 3.—Enter the total refund or credit of
Amounts paid to refinance a loan to a prior year(s) overpayment of interest. See issues, only the trustee or similar person is
construct a residence are not points to the Reimbursement of Overpaid Interest required to report.
extent they are allocable to debt that earlier. A governmental unit, or any of its
exceeds the debt incurred to construct the subsidiary agencies, that lends money
residence. Box 4.—Enter any other item you wish to
report to the payer, such as real estate secured by property must file Form
Prepaid Interest.—Report prepaid interest taxes, insurance, or if you are a collection 1099-A.
(other than points) only in the year in which agent, the name of the person for whom A subsequent holder of a loan is
it properly accrues. For example, interest you collected the interest. This box is treated as the lender for purposes of the
received on December 20, 1995, that optional and is provided only for your reporting requirement for events occurring
accrues by December 31 but is not due convenience. You do not have to report to after the loan is transferred to the new
until February 1, 1996, is reportable on the the IRS any information provided in this holder.
1995 Form 1098. box. You are not required to report the If more than one person lends money
Exception.—Interest received during the average balance of the mortgage. secured by property and one lender
current year that will properly accrue in full forecloses or otherwise acquires an
by January 15 of the following year may be interest in the property and the sale or
considered received in the current year, at Form 1099-A other acquisition terminates, reduces, or
your option, and is reportable on Form otherwise impairs the other lenders’
1098 for the current year. However, if any File Form 1099-A, Acquisition or security interests in the property, the other
part of an interest payment accrues after Abandonment of Secured Property, for lenders must file Form 1099-A for each of
January 15, then only the amount that each borrower if you lend money in their loans. For example, if a first trust
properly accrues by December 31 of the connection with your trade or business holder forecloses on a building, and the
current year is reportable on Form 1098 for and, in full or partial satisfaction of the second trust holder knows or has reason
the current year. For example, if you debt, you acquire an interest in property to know of such foreclosure, the second
receive a payment of interest that accrues that is security for the debt, or you have trust holder must file Form 1099-A for the
for the period December 20 through reason to know that the property has been second trust even though no part of the
January 20, you cannot report any of the abandoned. You need not be in the second trust was satisfied by the proceeds
interest that accrues after December 31 for business of lending money to be subject to of the foreclosure sale.
the current year. You must report the this reporting requirement.
interest that accrues after December 31 on Abandonment.—An abandonment occurs
Form 1098 for the following year. Coordination With Form 1099-C.—If, in when the objective facts and
the same calendar year, a debt is canceled circumstances indicate that the borrower
Statements to Payers of Record.—For in connection with the acquisition or intended to and has permanently
information about the requirement to abandonment of secured property and you discarded the property from use. You have
furnish a statement to the payer of record, would be required to file both Form 1099-A “reason to know” of an abandonment
see part H under General Instructions and Form 1099-C, Cancellation of Debt, based on all the facts and circumstances
earlier. you are required to file Form 1099-C only. concerning the status of the property. You
Recipient’s/Lender’s Name and Address You will meet your Form 1099-A filing will be deemed to know all the information
Box.—Enter the name and address of the requirement by making appropriate entries that would have been discovered through
filer of Form 1098. Use this same name in boxes 5 and 7 on Form 1099-C. You a reasonable inquiry when, in the ordinary
and address on Form 1096. may file both Forms 1099-A and 1099-C, course of business, the lender becomes
Payer’s/Borrower’s Name and Address but make no Form 1099-A entries in boxes aware or should become aware of
Box.—Enter the name and address of the 5 and 7 on Form 1099-C. circumstances indicating that the property
person who paid the interest (payer of Property.—Property means real property has been abandoned. If you expect to
record). (such as a personal residence), intangible commence a foreclosure, execution, or
property, or tangible personal property held similar sale within 3 months of the date
Note: Be careful to enter the recipient’s
for investment or used in a trade or you had reason to know that the property
and payer’s information in the proper
business. No reporting is required for a was abandoned, reporting is required as of
loan made to an individual and secured by the date you acquire an interest in the
Box 1.—Enter the interest (not including an interest in tangible personal property property or a third party purchases the
points) received on the mortgage from that is neither held for investment nor used property at such sale. If you expect to but
borrowers during the calendar year. in a trade or business. However, you must do not commence such action within 3
Include interest on a mortgage, a home file Form 1099-A if the personal property is months, the reporting requirement arises at
equity loan, or a line of credit or credit held for both personal use and either for the end of the 3-month period.
card loan secured by real property. Do not use in a trade or business or for Statements to Borrowers.—For
include government subsidy payments, investment. information about the requirement of
seller payments, or prepaid interest that
No reporting is required if the property furnishing a statement to the borrower, see
does not meet the exception explained
securing the loan is located outside the part H under General Instructions earlier.
earlier under Prepaid Interest. Interest
United States and the borrower has
Box 1.—Enter the date of your acquisition Form 1099-B, Proceeds From Broker and stripped coupons issued prior to July 1,
of the secured property or the date you Barter Exchange Transactions, for each 1982.
first knew or had reason to know that the person (a) for whom the broker has sold c. Retirement of short-term obligations
property was abandoned. An interest in the (including short sales) stocks, bonds, with original issue discount (reported on
property generally is acquired on the earlier commodities, regulated futures contracts, Form 1099-INT). However, Form 1099-B is
of the date title is transferred to the lender foreign currency contracts, forward required for the retirement of short-term
or the date possession and the burdens contracts, debt instruments, etc., or state obligations having no original issue
and benefits of ownership are transferred (b) who exchanged property or services discount.
to the lender. If an objection period is through the barter exchange.
provided by law, use the date the objection d. Callable demand obligations that have
Note: Report real estate transactions on no premium or discount.
period expires. If you purchase the Form 1099-S discussed later.
property at a sale held to satisfy the debt, 6. Sales of foreign currency unless under
such as at a foreclosure or execution sale, Brokers a forward or regulated futures contract that
use the later of the date of sale or the date requires delivery of foreign currency.
the borrower’s right of redemption expires. The term broker means a person who, in
7. Sales of fractional shares of stock if
Please use the following format to indicate the ordinary course of a trade or business,
gross proceeds are less than $20.
the date: MMDDYY. For example, for stands ready to effect sales to be made by
others. A corporation is a broker if it 8. Retirements of book-entry or
January 7, 1995, enter 010795.
regularly stands ready to redeem its stock registered form obligations if no interim
For an abandonment, enter the date you or retire its debt. However, if there are no transfers have occurred.
knew or had reason to know that the facts that indicate otherwise, a corporation 9. Exempt foreign persons.
property was abandoned unless you that purchases odd-lot shares from its
expect to commence a foreclosure, 10. Sales of Commodity Credit
stockholders is not a broker. If you Corporation certificates.
execution, or similar action within 3 manage a farm for someone else, you are
months, as explained earlier. If a third not considered a broker. 11. Spot or forward sales of agricultural
party purchases the property at a commodities. Agricultural commodities
foreclosure, execution, or similar sale, the For a sale of securities through a “cash include grain, feed, livestock, meat, oil
property is treated as abandoned, and you on delivery” or similar account, only the seed, timber, or fiber. A spot sale is a sale
have reason to know of its abandonment broker that receives the gross proceeds that results in almost immediate delivery of
on the date of sale. from the sale against delivery of the a commodity. A forward sale is a sale
securities sold is required to report the under a forward contract.
Box 2.—Enter the balance of the debt sale. However, if such broker’s customer is
outstanding at the time the interest in the a “second-party broker” that is an exempt However, sales of agricultural
property was acquired or on the date you recipient, only the second-party broker is commodities under a regulated futures
first knew or had reason to know that the required to report the sale. contract, sales of derivative interests in
property was abandoned. Include only agricultural commodities, and sales of
unpaid principal on the original debt. Do If the proceeds of a sale are paid in receipts for agricultural commodities
not include accrued interest or foreclosure convertible foreign currency, the amount to issued by a designated warehouse are
costs. be reported must be converted into U.S. reportable. A designated warehouse is a
dollars. You may use the exchange rate on warehouse, depository, or other similar
Box 3.—Make no entry is this box. the sales date or the exchange rate on the entity designated by a commodity
Box 4.—For a foreclosure, execution, or last business day of the reporting period in exchange in which or out of which a
similar sale, enter the fair market value of which the sale occurs. particular type of agricultural commodity is
the property. Generally, the gross Brokers must report each transaction deliverable to satisfy a regulated futures
foreclosure bid price is considered to be (other than regulated futures or foreign contract. Sales of warehouse receipts
the fair market value. If an abandonment or currency contracts) on a separate Form issued by any other warehouse are not
voluntary conveyance to the lender in lieu 1099-B. Transactions involving regulated reportable.
of foreclosure occurred and you checked futures or foreign currency contracts are to
“Yes” in box 5, enter the appraised value 12. Excepted sales designated in a
be reported on an aggregate basis. revenue ruling or revenue procedure. The
of the property. Otherwise, make no entry
in this box. To report substitute payments in lieu of sale of a precious metal (gold, silver,
dividends and tax-exempt interest, as platinum, or palladium) in any form that
Box 5.—Enter an “X” in the applicable box required by section 6045(d), do not use may be used to satisfy a Commodity
to indicate whether the borrower was Form 1099-B. See Box 8 under Form Futures Trading Commission
personally liable for repayment of the debt 1099-MISC later. (CFTC)-approved regulated futures
at the time the debt was created or, if
Form 8308, Report of a Sale or contract (RFC) is an excepted sale if the
modified, at the time of the last
Exchange of Certain Partnership Interests, quantity, by weight or by number of items,
does not have to be filed if Form 1099-B is is less than the minimum required to
Box 6.—Enter a general description of the required for the transfer of the partnership satisfy a CFTC-approved RFC. A sale of a
property. For real property, generally you interest. precious metal in any form that cannot be
must enter the address of the property, or, used to satisfy a CFTC-approved RFC is
if the address does not sufficiently identify No return is required by brokers for:
an excepted sale.
the property, enter the section, lot, and 1. Sales by exempt recipients, including
For example, Form 1099-B is not
block. For personal property, enter the corporations, charitable organizations,
required to be filed for the sale of a single
applicable type, make, and model. For individual retirement plans, the United
gold coin in the form and quality
example, describe a car as “Car—1995 States, a state and political subdivisions.
deliverable in satisfaction of a
Buick Regal.” Use a category such as 2. Sales initiated by dealers in securities CFTC-approved contract since all CFTC
“Office Equipment” to describe more than and financial institutions. contracts for gold coins currently call for
one piece of personal property, such as six
3. Sales by certain custodians and delivery of at least 25 coins.
desks and seven typewriters. Enter “CCC”
for crops forfeited on Commodity Credit trustees. Sales of precious metals for a single
Corporation loans. 4. Sales at issue price of interests in customer during a 24-hour period must be
certain regulated investment companies. aggregated and treated as a single sale to
5. Obligor payments on: determine if this exception applies. This
Form 1099-B a. Nontransferable obligations, such as
exception does not apply if the broker
knows or has reason to know that a
savings bonds or CDs. customer, either alone or with a related
Any person, including a governmental unit
b. Obligations for which gross proceeds person, is engaging in sales to avoid
and any subsidiary agency, doing business
are reported on other Forms 1099, such as information reporting.
as a broker or barter exchange must file
Barter Exchanges on bonds sold between payment dates (or lending transaction. A lending transaction is
on a payment date) should not be included a transaction in which a lender extends
A barter exchange is any person with in this box. Instead, report this accrued credit, including revolving credit, to a
members or clients who contract either interest on Form 1099-INT. A loss from a borrower.
with each other or with such person to closing transaction on a forward contract
trade or barter property or services either 4. A debt discharged for a person other
must be shown as a negative amount by than the primary (or first-named) debtor in
directly or through such person. The term enclosing it in parentheses.
does not include arrangements that the case of multiple debtors, for debts
provide solely for the informal exchange of Box 3.—Enter the gross amounts received incurred before January 1, 1995.
similar services on a noncommercial basis. by a member or client of a barter File Form 1099-C, Cancellation of Debt,
Persons who are not a barter exchange exchange for goods or services. This for each debtor for which you canceled (or
but who trade services do not file Form includes cash received, property or discharged) a debt (or indebtedness) owed
1099-B. However, they may be required to services received, a credit on your books, to you of $600 or more and you are a
file Form 1099-MISC. or scrip issued. Do not report negative financial institution, a credit union, or a
amounts. Federal Government agency (including one
Barter exchanges must report each
transaction involving noncorporate Box 4.—Enter backup withholding. For of the three agencies listed under Who
members or clients of a barter exchange example, persons who have not furnished Must File below). You must file even
on a separate Form 1099-B. Transactions their TIN to you in the manner required are though the debtor may not be subject to
involving corporate members or clients of a subject to withholding at a 31% rate on tax on the canceled debt. That is, you are
barter exchange may be reported on an certain amounts required to be reported on not required to determine whether the
aggregate basis. this form. debtor qualifies for exclusion under section
Box 5.—For broker transactions, enter a 108. For example, debts discharged in
In the recipient area of the forms, enter bankruptcy are reportable.
information about the member or client brief description of the disposition item,
that provided the property or services in e.g., 100 shares of XYZ Corp. stock. If You are not required to aggregate
the exchange. necessary, abbreviate the description so multiple discharges of debt of less than
that it fits within box 5. For regulated $600 during a year unless the separate
No return is required by barter futures contracts and forward contracts, discharges are under a plan to evade the
exchanges for: enter “RFC” or other appropriate Form 1099-C reporting requirements.
1. Exchanges through a barter exchange description and any amount subject to File Form 1099-C if the debtor is an
having fewer than 100 transactions during backup withholding, under Temporary individual, corporation, partnership, trust,
the calendar year. Regulations section 35a.9999-3, Q/A-23. estate, association, or company. Backup
2. Exempt foreign persons. Note: The amount withheld in these withholding does not apply.
situations is to be included in box 4.
Coordination With Form 1099-A.—If, in
Brokers and Barter Exchanges For bartering transactions, show the the same calendar year, a debt is canceled
Statements to Recipients.—For services or property provided. in connection with the acquisition or
information about the requirement to Box 6.—Enter the profit or (loss) realized abandonment of secured property and you
furnish a statement to the proceeds by the customer on closed regulated would be required to file both Form
recipient, see part H under General futures or foreign currency contracts in 1099-C and Form 1099-A, Acquisition or
Instructions earlier. 1995. For more information on reporting Abandonment of Secured Property, you
2nd TIN Not.—You may enter an “X” in foreign currency contracts, see Temporary are required to file Form 1099-C only. You
this box if you were notified by the IRS Regulations section 35a.9999-3, Q/A-26. will meet your Form 1099-A filing
twice within 3 calendar years that the Box 7.—Enter the unrealized profit or (loss) requirement by making appropriate entries
payee provided an incorrect taxpayer on open regulated futures or foreign in boxes 5 and 7 on Form 1099-C. You
identification number (TIN). If you mark this currency contracts at the end of 1994. may file both Forms 1099-A and 1099-C,
box, you will comply with a safe harbor but make no Form 1099-A entries in boxes
Box 8.—Enter the unrealized profit or (loss) 5 and 7 on Form 1099-C. See the
due diligence requirement of Temporary on open regulated futures or foreign
Regulations section 35a.9999-3, Q/A-89, instructions for Form 1099-A earlier and
currency contracts as of December 31, Box 5 and Box 7 later.
and the IRS will not send you any further 1995.
notices about this account. Also see Who Must File.—File Form 1099-C if you
Box 9.—Enter the aggregate profit or (loss) are a financial institution described in
Regulations section 301.6724-1(g).
for the year from regulated futures or section 581 or 591(a) (such as a domestic
Box 1a.—For broker transactions, enter foreign currency contracts. Use boxes 6, 7,
the trade date of the sale or exchange. For bank, trust company, building and loan or
and 8 to figure the aggregate profit or savings and loan association); a credit
barter exchanges, enter the date that cash, (loss).
property, a credit, or scrip is actually or union; a Federal executive agency defined
constructively received. Please use the in section 6050M, the Federal Deposit
following format to indicate the date: Form 1099-C Insurance Corporation (FDIC), the
MMDDYY. For example, for January 7, Resolution Trust Corporation (RTC), the
1995, enter 010795. For aggregate National Credit Union Administration
Caution: The following instructions (except (NCUA), or any successor or subunit of a
reporting, no entry is required. those under Coordination With Form Federal executive agency, FDIC, RTC, or
Box 1b.—For transactional reporting by 1099-A and related instructions under Box NCUA. Also file Form 1099-C if you are a
brokers, enter the CUSIP (Committee on 5 and Box 7 later) are based on temporary corporation that is a subsidiary of a
Uniform Security Identification Procedures) regulations under section 6050P issued in financial institution or credit union, but only
number of the obligation. December 1993. Final regulations under if, because of your affiliation, you are
Box 2.—Enter the gross proceeds from section 6050P are expected to be issued in subject to supervision and examination by
any disposition of securities (including early 1995. For debts discharged before a Federal or state regulatory agency.
short sales), commodities, or forward the effective date of those final regulations,
Debt Defined.—A debt is any amount
contracts. To determine gross proceeds, no penalties will be imposed if you do not
owed to you including principal, interest,
you may take into account commissions report:
penalties, administrative costs, and fines,
and option premiums if this treatment is 1. A debt discharged in bankruptcy to the extent they are indebtedness under
consistent with your books. You may not (under title 11 of the U.S. Code). section 61(a)(12). The amount of debt
take into account state and local transfer 2. A debt discharged as the result of the discharged or canceled may be all or only
taxes. Check the applicable box to indicate expiration of the statute of limitations for part of the total amount owed.
which amount has been reported to the collection of the debt.
IRS. Do not include amounts shown in When Is a Debt Canceled or
boxes 6 through 9. Any accrued interest 3. Any amount other than principal for a Discharged?—A debt is canceled or
debt that arose in connection with a discharged when an identifiable event
occurs that indicates the debt will never or Discharged? earlier. Use the format “dividends” on deposit or on share
have to be paid by the debtor, taking into MMDDYY to indicate the date. For accounts in cooperative banks, credit
account all the facts and circumstances. example, for January 7, 1995, enter unions, domestic building and loan
An identifiable event includes, but is not 010795. associations, domestic and Federal savings
limited to: Box 2.—Enter the amount of the canceled and loan associations, and mutual savings
debt. See Debt Defined earlier. banks.
1. A discharge of a debt under title 11 of
the U.S. Code (bankruptcy), Box 3.—Enter any interest included in the An exempt-interest dividend from a
canceled debt in box 2. regulated investment company retains its
2. An agreement between the creditor tax-exempt status and is not reported on
and the debtor to cancel all or part of a Box 4.—Enter any penalties, fines, or Form 1099-DIV or 1099-INT.
debt (including an agreement that results in administrative costs included in the
an exchange under section 1001), if the canceled debt in box 2. Substitute Payments in Lieu of
last event necessary to cancel the debt Dividends.—For payments received by a
Box 5.—Enter a description of the origin of broker on behalf of a customer in lieu of
has occurred, or the debt, such as student loan, mortgage, dividends as a result of the transfer of a
3. A cancellation or extinguishment of or credit card expenditure. Be as specific customer’s securities for use in a short
the debt by operation of law that makes as possible. If you are filing a combined sale, see Box 8 under Form 1099-MISC
the debt unenforceable (for example, the Form 1099-C and 1099-A, also enter a later.
statute of limitations for collection of the description of the property.
debt expires). RICs.—If a regulated investment company
Box 6.—Enter an “X” in the checkbox if (RIC) declares a dividend in October,
A bookkeeping entry, such as a deduction the debt was discharged in bankruptcy, if November, or December payable to
for book or regulatory reporting purposes known. shareholders of record on a specified date
or a partial or full bad debt deduction for Box 7.—Make an entry in this box only if in such a month, the dividends are treated
tax purposes, is not, alone, an identifiable you are filing a combined Form 1099-C as paid by the RIC and received by the
event. However, such bookkeeping entry is and 1099-A. For a foreclosure, execution, shareholders on December 31 of such year
one of the facts and circumstances to take or similar sale, enter the fair market value as long as the dividends are actually paid
into account to determine if a discharge or of the property. Generally, the gross by the RIC during January of the following
cancellation has occurred. foreclosure bid price is considered to be year. Such dividends should be reported
Collection activity by the creditor is the fair market value. If an abandonment or on Form 1099-DIV for the year preceding
another one of the facts and voluntary conveyance to the lender in lieu the January they are actually paid. See
circumstances to take into account to of foreclosure occurred, enter the section 852(b)(7).
determine if a discharge or cancellation appraised value of the property. If such a dividend paid in January is
has occurred. In determining that part of a subject to backup withholding, it must be
debt is canceled, disregard collection withheld when the dividend is actually
activity on the remaining part of the debt. Form 1099-DIV paid. Therefore, backup withhold in
Multiple Debtors.—If you cancel a debt January, deposit the withholding when
with more than one debtor, you must file File Form 1099-DIV, Dividends and appropriate, and reflect it on Form 945 for
Form 1099-C for each debtor that had a Distributions, for each person (a) to whom the year withheld. However, since the
debt of $600 or more canceled. If the you have paid gross dividends and other dividend is reportable on Form 1099-DIV in
multiple debtors are jointly and severally distributions on stock (box 1a) of $10 or the prior year, the related backup
liable on the debt, report the entire amount more, (b) for whom you have withheld and withholding is also reportable on the prior
of the canceled debt on each debtor’s paid any foreign tax on dividends and year Form 1099-DIV.
Form 1099-C. other distributions on stock, (c) for whom
Restricted Stock.—For information about
Recordkeeping.—If you are required to file you have withheld any Federal income tax
reporting dividends on restricted stock, see
Form 1099-C, you must retain a copy of under the backup withholding rules, or (d)
Rev. Procs. 80-11, 1980-1 C.B. 616, and
that form or be able to reconstruct the to whom you paid $600 or more as part of
83-38, 1983-1 C.B. 773, and Rev. Rul.
data for at least 4 years from the due date a liquidation.
83-22, 1983-1 C.B. 17.
of the return. Section 404(k) Dividend.—Report on Form
Statements to Recipients.—For an
Requesting TINs.—You must make all 1099-DIV dividends distributed under
explanation of the requirement to furnish
reasonable efforts to obtain the taxpayer section 404(k) on stock held by an
an official form to recipients in person or
identification number (TIN) of the person employee stock ownership plan (ESOP) or
by statement mailing, see part H under
whose debt was canceled. You may obtain a tax credit ESOP. However, if a section
General Instructions earlier. Also see Pub.
the TIN when the debt is incurred. If you 404(k) distribution is made in the same
do not obtain the TIN before the debt is year as a total distribution, the entire
amount should be reported as an amount 2nd TIN Not.—You may enter an “X” in
canceled, you must request the debtor’s this box if you were notified by the IRS
TIN. Your request must clearly notify the includible in income on Form 1099-R.
twice within 3 calendar years that the
debtor that the Internal Revenue Service Exceptions.—You are not required to file
payee provided an incorrect taxpayer
requires the debtor to furnish its TIN and Form 1099-DIV for payments made to
identification number (TIN). If you mark this
that failure to furnish such TIN subjects the certain payees including a corporation, a
box, you will comply with a safe harbor
debtor to a $50 penalty imposed by the tax-exempt organization, an individual
due diligence requirement of Temporary
IRS. No particular form is required to retirement arrangement (IRA), a U.S.
Regulations section 35a.9999-3, Q/A-89,
request the TIN, but if you use Form W-9, agency, a state, the District of Columbia, a
and the IRS will not send you any further
you will satisfy the reasonable efforts U.S. possession, or a registered securities
notices about this account. Also see
requirement. A debtor is not required to or commodities dealer.
Regulations section 301.6724-1(g).
certify his or her TIN under penalties of Dividends.—If you make a payment that
perjury. Box 1a.—Enter gross dividends, including
may be a dividend, but you are unable to
those from money market funds, and other
Statements to Debtors.—Furnish each determine whether any part of the payment
distributions on stock. Include reinvested
debtor with Copy B of Form 1099-C or a is a dividend by the time you must file
dividends as gross dividends. Include all
substitute statement that complies with the Form 1099-DIV, the entire payment must
amounts shown in boxes 1b, 1c, 1d, and
requirements of Pub. 1179. See part H be reported as a dividend. See regulations
1e. Do not include in box 1a amounts
under General Instructions earlier. You under section 6042 for a definition of
reported in boxes 5 and 6.
have furnished a statement to the debtor if dividends.
it is mailed to the debtor’s last known Box 1b.—Enter ordinary dividends. Also
Note: Certain distributions commonly
address. include this amount in box 1a.
referred to as “dividends” are actually
Box 1.—Enter the date the debt was interest and are to be reported on Form Box 1c.—Enter capital gain distributions.
canceled. See When Is a Debt Canceled 1099-INT. These include so-called Also include this amount in box 1a.
Box 1d.—Enter nontaxable distributions, if recipient. However, you must file Form
determinable. Also include this amount in 1099-G with the IRS in all cases. Form 1099-INT
box 1a. (File Form 5452, Corporate Report A tax on dividends, a tax on net gains
of Nondividend Distributions, if you pay from the sale or exchange of a capital
nontaxable distributions to shareholders.) File Form 1099-INT, Interest Income, for
asset, and a tax on the net taxable income each person (1) to whom you paid
Box 1e.—Enter the stockholder’s pro rata of an unincorporated business are taxes on amounts reportable in boxes 1 and 3 of at
share of certain amounts deductible by a gain or profit rather than on gross receipts. least $10 (except for the $600 limit for
nonpublicly offered regulated investment Therefore, they are income taxes, and any interest paid in the course of your trade or
company in computing its taxable income. refund, credit, or offset of $10 or more of business described in the instructions
This amount is includible in the these taxes is reportable on Form 1099-G. below in Box 1), (2) for whom you withheld
stockholder’s gross income under section In the case of the dividends tax and the and paid any foreign tax on interest, or
67(c) and must also be included in box 1a. capital gains tax, if you determine that the (3) from whom you withheld any Federal
Box 2.—Enter backup withholding. For recipient did not itemize deductions, as income tax under the backup withholding
example, persons who have not furnished explained above, you are not required to rules regardless of the amount of the
their TIN to you in the manner required are furnish a statement to the recipient. payment.
subject to withholding at a 31% rate on However, in the case of the tax on
unincorporated businesses, you must Only report interest payments made in
certain dividend payments reported on this the course of your trade or business
form. furnish a statement to the recipient in all
cases, as this is a tax that applies including Federal, state, and local
Box 3.—Enter any foreign tax withheld and exclusively to income from a trade or government agencies and activities
paid on dividends and other distributions business. See the instructions for box 8 deemed nonprofit, or for which you were a
on stock. A regulated investment company and Rev. Rul. 86-140, 1986-2 C.B. 195. nominee/middleman.
must report only the amount it elects to Exceptions.—You are not required to file
pass through to the shareholder. Report If you pay interest of $600 or more on
the refund, you must file Form 1099-INT Form 1099-INT for payments made to
this amount in U.S. dollars. certain payees including a corporation, a
and furnish a statement to the recipient.
Box 4.—Enter the name of the foreign For interest payments of less than $600, if tax-exempt organization, an individual
country or U.S. possession to which the you wish you may enter the amount with retirement arrangement (IRA), a U.S.
withheld tax applies. an appropriate designation such as agency, a state, the District of Columbia, a
Note: Boxes 5 and 6 apply only to “Interest Income” in the blank box on the U.S. possession, or a registered securities
corporations in partial or complete statement to the recipient. or commodities dealer.
liquidation. Box 3.—No entry is required in box 3 if the Note: Do not report tax-exempt or
Box 5.—Enter cash distributed as part of a refund, credit, or offset is for the 1994 tax tax-deferred interest, such as interest on
liquidation. Do not include this amount in year. If it is for any other tax year, enter municipal bonds or interest that is earned
box 1a. the year for which the refund, credit, or but not distributed from an IRA.
Box 6.—Enter noncash distributions made offset was made in this box. Also, if the An exempt-interest dividend from a
as part of a liquidation. Show the fair refunds, credits, or offsets are for more regulated investment company retains its
market value as of the date of distribution. than 1 tax year, report the amount for each tax-exempt status and is not reported on
Do not include this amount in box 1a. year on a separate Form 1099-G. Use the Form 1099-INT or 1099-DIV.
format “YYYY” to make the entry in this When Payment Made.—Generally, interest
S Corporations box. For example, enter 1993, not ’93. is paid when it is credited or set apart for a
Box 1a.—Report as dividends on Form Box 4.—Enter backup withholding. For person without any substantial limitation or
1099-DIV only distributions made during example, persons who have not furnished restriction as to time, manner, or condition
1995 out of accumulated earnings and their TIN to you become subject to of payment. The interest must be made
profits. See section 1368 for more withholding at a 31% rate on payments available so that it may be drawn on at any
information. required to be reported in box 6 or 7 on time and its receipt brought within the
this form. control and disposition of the person.
Box 5.—Make no entries in this box. For payments made on obligations
Form 1099-G Box 6.—Enter any amount of a taxable subject to transactional reporting (e.g.,
grant administered by a Federal, state, or savings bonds, interest coupons, and other
File Form 1099-G, Certain Government local program to provide subsidized energy demand obligations), interest is paid at the
Payments, if you have made certain financing or grants for projects designed to time the obligation is presented for
payments as a unit of a Federal, state, or conserve or produce energy, but only with payment. For example, interest on a
local government. respect to section 38 property or a coupon detached from a bond is paid
Statements to Recipients.—Furnish a dwelling unit located in the United States. when it is presented for payment.
copy of Form 1099-G or a substitute Also report amounts of other taxable Successor/Predecessor Corporation.—A
statement to each recipient, except as grants of $600 or more. A Federal grant is successor corporation and a predecessor
explained below under Box 2. Also see ordinarily taxable unless stated otherwise corporation may agree that the successor
part H under General Instructions earlier. in the legislation authorizing the grant. Do corporation will file one Form 1099-INT for
Box 1.—Enter payments of $10 or more in not report scholarship or fellowship grants. each payee combining the reportable
unemployment compensation including See Scholarships under Form 1099-MISC interest paid by both corporations (under
Railroad Retirement Board payments for later. section 6049). If the two corporations do
unemployment. Box 7.—Enter U.S.D.A. agricultural not agree, or if other requirements
subsidy payments made to recipients described below are not met, the
Box 2.—Enter refunds, credits, or offsets predecessor must file Forms 1099-INT to
of state or local income tax of $10 or during the year. If you are a nominee that
received subsidy payments for another report the interest payments it made during
more you made to recipients. If recipients the year, and the successor must file
deducted the tax paid to a state or local person, file Form 1099-G to report the
actual owner of the payments, and report Forms 1099-INT to report its own
government on their Federal income tax payments.
returns, any refunds, credits, or offsets the amount of the payments in box 7.
may be taxable to them. If you can Box 8.—If the amount in box 2 is a refund, The combined reporting procedure is
determine that the recipient did not claim credit, or offset attributable to an income available only when all the following
itemized deductions on the recipient’s tax that applies exclusively to income from conditions are met:
Federal income tax return for the tax year a trade or business and is not a tax of 1. The successor corporation acquires
giving rise to the refund, credit, or offset general application, enter an “X” in this substantially all the assets and assumes
you are not required to furnish a copy of box. substantially all the liabilities of the
Form 1099-G or a statement to the predecessor corporation.
2. During the year of acquisition, but Box 1.—Enter interest not included in box Box 5.—Enter any foreign tax withheld and
before the acquisition, the predecessor 3. Include amounts, whether or not paid on interest. Report this amount in
made reportable interest payments to designated as interest, that are paid or U.S. dollars.
payees. credited to any person’s account by Box 6.—Enter the name of the foreign
3. During the year of acquisition, but savings and loan associations, mutual country or U.S. possession to which the
after the acquisition, the predecessor did savings banks not having capital stock withheld tax applies.
not make any reportable interest represented by shares, building and loan
payments. associations, cooperative banks, REMICs and Issuers of
homestead associations, credit unions, or Collateralized Debt Obligations
Agreement.—The predecessor and similar organizations. Include interest on
successor must agree that the successor bank deposits, accumulated dividends paid Real estate mortgage investment conduits
assumes the predecessor’s entire by a life insurance company, indebtedness (REMICs), issuers of collateralized debt
obligation to file Forms 1099-INT for (including bonds, debentures, notes and obligations (CDOs), and any broker or
reportable interest payments made in the certificates other than those of the U.S. middleman who holds as a nominee a
year of acquisition. If they so agree and if Treasury) issued in registered form or of a REMIC regular interest or CDO must file
the successor satisfies the predecessor’s type offered to the public, or from which Form 1099-INT to report interest of $10 or
obligation, the predecessor is relieved of you withheld Federal income tax or foreign more, other than original issue discount
the obligation to file Forms 1099-INT. tax. Also include interest paid in the (OID), accrued to a REMIC regular interest
Combined Form 1099-INT.—The Form course of your trade or business not holder during the year or paid to the holder
1099-INT filed by the successor for each meeting these criteria, such as interest on of a CDO. If you are also reporting OID,
payee must include the reportable interest delayed death benefits paid by a life this interest and the OID can be reported
payments made by the predecessor in the insurance company, or interest on a state on Form 1099-OID. It is not necessary to
acquisition year and the reportable interest or Federal income tax refund, if the interest file both Forms 1099-INT and 1099-OID.
payments made by the successor in that totals $600 or more for any person. In See Form 1099-OID later.
year. Any backup withholding also must be addition, report interest accrued to a You are not required to file or issue
combined on the form. When providing REMIC regular interest holder or paid to a Form 1099-INT for exempt recipients
Form 1099-INT, or an acceptable CDO holder, as explained below. including the following holders of a REMIC
substitute form, to the interest recipient, Include in box 1 any accrued interest on regular interest or a CDO:
the successor may include additional bonds sold between interest dates (or on a
information explaining the aggregate 1. A corporation.
reporting of the interest. 2. A broker.
Also show original issue discount on
Statement required.—By the due date short-term obligations of 1 year or less and 3. A middleman/nominee.
of the Forms 1099-INT, the successor interest on all bearer certificates of deposit. 4. A financial institution.
must file a statement containing (1) an
indication that Forms 1099-INT are being Do not include in box 1 interest on 5. An IRA.
filed on a combined basis under Rev. Proc. tax-free covenant bonds, which is 6. A tax-exempt organization.
90-57 and (2) the name, address, and reportable on Form 1042-S, Foreign For additional exempt recipients, see
taxpayer identification numbers (TINs) of Person’s U.S. Source Income Subject to Regulations section 1.6049-7(c).
both the successor and predecessor Withholding, or dividends from money
corporations. This statement must be sent market funds, which are reportable on Box 1.—Report in box 1 the amount of
separately from the Forms 1099-INT to: Form 1099-DIV. Also, do not include any interest, other than OID, accrued to each
IRS-Martinsburg Computing Center, P.O. description in box 1. If you wish to show a REMIC regular interest holder or paid to a
Box 1359, Attn: Chief, Magnetic Media 2, description, use the blank box above CDO holder for the period during the year
Martinsburg, WV 25401-1359. box 1. for which the return is made. If you are a
Box 2.—Enter interest or principal forfeited single-class REMIC (as defined in
For more information, see Rev. Proc. Temporary Regulations section
90-57, 1990-2 C.B. 641. because of an early withdrawal of time
deposits, such as an early withdrawal from 1.67-3T(a)(2)(ii)), include in box 1 the
Statements to Recipients.—For an a CD, that is deductible from gross income regular interest holder’s share of
explanation of the requirement to furnish by the recipient. Do not reduce the amount investment expenses of the REMIC for the
an official form to recipients in person or reported in box 1 by the amount of the year.
by statement mailing, see part H under forfeiture. For detailed instructions for
General Instructions earlier. Also see Pub. Statements to Holders.—For each Form
determining the amount of forfeiture 1099-INT you are required to file, you must
1179. If you have furnished Forms deductible by the depositor, see Rev. Ruls.
1099-INT to a recipient for amounts furnish a statement to the REMIC regular
75-20, 1975-1 C.B. 29, and 75-21, 1975-1 interest or CDO holder identified on the
received during the year at the time of the C.B. 367.
transaction, such as you might have done form. The statement must contain the
for window transactions, do not include Box 3.—Enter interest on U.S. Savings information shown on Form 1099-INT,
these same amounts in a Form 1099-INT Bonds, Treasury bills, Treasury notes, and including the legend shown on Copy B of
furnished to the same recipient for other Treasury bonds. Do not include this the official Form 1099-INT, and an
payments during the year. amount in box 1. indication that these items are being
If you make payment on a U.S. Savings furnished to the IRS. The statement must
2nd TIN Not.—You may enter an “X” in also show the information specified in
this box if you were notified by the IRS Bond or other U.S. obligation on which
interest is reportable, enter your name, Regulations section 1.6049-7(f)(2)(i). In
twice within 3 calendar years that the addition, the statement furnished by a
payee provided an incorrect TIN. If you address, and Federal identification number
on Forms 1099-INT and 1096, not those of REMIC must show, for each calendar
mark this box, you will comply with a safe quarter, the information specified in
harbor due diligence requirement of the U.S. Treasury Department or the
Bureau of Public Debt. Regulations section 1.6049-7(f)(3). Also see
Temporary Regulations section Regulations section 1.6049-7(f)(3)(ii) for
35a.9999-3, Q/A-89, and the IRS will not Box 4.—Enter backup withholding. For information that may be required to be
send you any further notices about this example, persons who have not furnished reported to a real estate investment trust
account. Also see Regulations section their TIN to you in the manner required (REIT) that holds a regular interest.
301.6724-1(g). become subject to withholding at a 31%
rate on payments required to be reported A single-class REMIC (as defined in
Payer’s RTN (optional).—If you are a Temporary Regulations section
financial institution that wishes to in box 1 (which may be reduced by the
amount reported in box 2) and box 3 on 1.67-3T(a)(2)(ii)) must include in the
participate in the program for direct statement the investment expenses paid or
deposit of refunds of electronic filers, you this form.
accrued during each calendar quarter by
may enter your routing and transit number the REMIC for which the REMIC is allowed
a deduction under section 212 and the business when payments are made in the the payment in box 1 of Form W-2. If you
proportionate share of those investment course of such trade or business. Thus, made the payment after the year of death,
expenses allocated to the regular interest personal payments are not reportable. You do not report it on Form W-2, and do not
holder. are engaged in a trade or business if you withhold social security and Medicare
The statement must be furnished to operate for gain or profit. However, taxes.
holders by March 15. To meet the nonprofit organizations are considered to Whether the payment is made in the
statement requirement, you may furnish a be engaged in a trade or business and are year of death or after the year of death,
copy of Form 1099-INT and a separate subject to the reporting requirement. you also must report it on Form
statement containing the additional Nonprofit organizations subject to the 1099-MISC for the payment to the estate
information to the REMIC regular interest reporting requirements include trusts of or beneficiary. Report the payment in box
or CDO holder. qualified pension or profit-sharing plans of 3 (rather than in box 7 as specified in Rev.
employers, certain organizations exempt Rul. 86-109, 1986-2 C.B. 196). Enter the
For information about reporting income from tax under section 501(c) or (d), and
to REMIC residual interest holders, see the name and TIN of the payment recipient on
farmers’ cooperatives that are exempt from Form 1099-MISC. For example, if the
instructions on Schedule Q (Form 1066), tax under section 521. Payments by
Quarterly Notice to Residual Interest recipient is an individual beneficiary, enter
Federal, state, or local government the name and SSN of the individual; if the
Holder of REMIC Taxable Income or Net agencies are also reportable.
Loss Allocation. recipient is the estate, enter the name and
Exceptions.—Some payments are not EIN of the estate. The general backup
Form 8811 and Reporting by Brokers or required to be reported on Form withholding rules apply to this payment.
Middlemen.—REMICs and issuers of 1099-MISC, although they may be taxable However, death benefits from qualified
CDOs must also file Form 8811, to the recipient. Payments for which a and nonqualified deferred compensation
Information Return for Real Estate Form 1099-MISC is not required include: plans paid to the estate or beneficiary of a
Mortgage Investment Conduits (REMICs) (1) payments to a corporation, except deceased employee are not reportable on
and Issuers of Collateralized Debt those required to be reported in boxes 6 Form 1099-MISC but are reportable on
Obligations, within 30 days after the and 8, (2) payments for merchandise, Form 1099-R. See the instructions for
startup day of the REMIC or issue date of (3) payments of rent to real estate agents, Form 1099-R later in this publication.
a CDO. The IRS will use the information on (4) wages paid to employees (report on
Forms 8811 to publish Pub. 938, Real Form W-2), (5) business travel allowances Example.—Before Employee A’s death
Estate Mortgage Investment Conduits paid to employees (may be reportable on on June 15, 1995, A was employed by
(REMICs) Reporting Information, for use by Form W-2), and (6) PS 58 costs (report on Employer X and received $10,000 in wages
certain brokers, middlemen, corporations, Form 1099-R). See below for additional on which Federal income tax of $1,500
and others specified in Regulations section payments not reportable on Form was withheld. When A died, X owed A
1.6049-7(e)(4). 1099-MISC. $2,000 in wages and $1,000 in accrued
vacation pay. The total of $3,000 was paid
For the requirements that a REMIC or Fees paid to informants.—A payment to A’s estate on July 20, 1995. Because X
CDO issuer or a broker or middleman who to an informant as an award, fee, or made the payment during the year of
holds a REMIC regular interest or a CDO reward for information about criminal death, X must withhold social security and
furnish certain information on request, see activity is not required to be reported if the Medicare taxes on the $3,000 payment
Regulations sections 1.6049-7(e) and payment is made by a Federal, state, or and must complete Form W-2 as follows:
1.6049-7(f)(7). local government agency, or by a nonprofit
organization exempt from tax under ● Box 1—10000.00 (does not include the
section 501(c)(3) that makes the payment $3,000 accrued wages and vacation pay)
Form 1099-MISC to further the charitable purpose of ● Box 2—1500.00
lessening the burdens of government. For ● Box 3—13000.00 (includes the $3,000
File Form 1099-MISC, Miscellaneous more information, see Regulations section accrued wages and vacation pay)
Income, for each person to whom you 1.6041-3(n).
● Box 4—806.00 (includes 6.2% of the
have paid (1) at least $10 in royalties or Scholarships.—Do not use Form $3,000 accrued wages and vacation pay)
broker payments in lieu of dividends or 1099-MISC to report scholarship or
tax-exempt interest (see Box 8), ● Box 5—13000.00 (includes the $3,000
fellowship grants. Scholarship or fellowship
(2) at least $600 in rents, services accrued wages and vacation pay)
grants that are taxable to the recipient
(including parts and materials), prizes and because they are paid for teaching, ● Box 6—188.50 (includes 1.45% of the
awards, other income payments, and research, or other services as a condition $3,000 accrued wages and vacation pay)
medical and health care payments, or for receiving the grant are considered Employer X also must complete Form
(3) any fishing boat proceeds. In addition, wages and must be reported on Form W-2. 1099-MISC as follows:
use Form 1099-MISC to report that you Other taxable scholarship or fellowship
made direct sales of at least $5,000 of ● Box 3—3000.00 (Even though amounts
payments (to a degree or nondegree were withheld for social security and
consumer products to a buyer for resale. candidate) are not required to be reported
You must also file Form 1099-MISC for Medicare taxes, the gross amount is
by you to the IRS on any form. See Notice reported here.)
each person from whom you have withheld 87-31, 1987-1 C.B. 475, for more
any Federal income tax under the backup information. If Employer X made the payment after the
withholding rules regardless of the amount year of death, the $3,000 would not be
of the payment. Report only payments Deceased Employee’s Wages Paid to subject to social security and Medicare
made in the course of your trade or Estate or Beneficiary.—If an employee taxes and would not be shown on Form
business, including those made by Federal, dies during the year, you must report on W-2. However, the employer would still file
state, or local government agencies and Form 1099-MISC the accrued wages, Form 1099-MISC.
nonprofit organizations. vacation pay, and other compensation paid
after the date of death. If you made the Employee Business Expense
Caution: Be sure to report payments in the payment in the same year the employee Reimbursements.—Do not use Form
proper box because the IRS uses this died, you must withhold social security and 1099-MISC to report employee business
information to determine whether the Medicare taxes on the payment and report expense reimbursements. Payments made
recipient has properly reported the them only as social security and Medicare to employees under a nonaccountable plan
payment. Generally, amounts reportable in wages on the employee’s Form W-2 to are reportable as wages on Form W-2.
box 7 are subject to self-employment tax. If ensure proper social security and Medicare Generally, payments made to employees
payments are not subject to this tax and credit is received. On the Form W-2, show under an accountable plan are not
they are not reportable elsewhere on Form the payment as social security wages (box reportable on Form W-2, except in certain
1099-MISC, report the payments in box 3. 3) and Medicare wages and tips (box 5) cases when you pay per diem or mileage
Trade or Business.—Report payments and the social security and Medicare taxes allowance. For more information, see the
only if you are engaged in a trade or withheld in boxes 4 and 6; do not show Instructions for Form W-2 and Pub. 463,
Travel, Entertainment, and Gift Expenses. agent on the statement of account for least $600. However, if the arrangement is
For information on reporting employee lottery tickets covered by that statement. a joint venture, the joint venture must file a
moving expense reimbursements on Form See Rev. Rul. 92-96, 1992-2 C.B. 281. Form 1065 and provide each partner with
W-2, see the Instructions for Form W-2. Escrow Agent; Construction Project.— information necessary to report the
Transit Passes and Parking for When an escrow agent maintains partner’s share of the taxable income.
Independent Contractors.—Although owner-provided funds in an escrow Coin-operated amusements include video
qualified transportation fringes cannot be account for a construction project, games, pinball machines, jukeboxes, pool
provided to independent contractors, the performs an oversight function for the tables, slot machines, and other machines
de minimis fringe rules for transit passes construction project, and makes payments and gaming devices operated by coins or
and parking apply to independent for the owner and the general contractor, tokens inserted into the machines by
contractors. Tokens or farecards that the escrow agent must file Form individual users. For more information, see
enable an independent contractor to 1099-MISC for reportable payments of Rev. Rul. 92-49, 1992-1 C.B. 433.
commute on a public transit system (not $600 or more. This requirement applies Box 2.—Enter gross royalty payments of
including privately-operated van pools) are whether or not the escrow agent is a bank. $10 or more before reduction for
excludable from the independent For more information, see Rev. Rul. 93-70, severance and other taxes that may have
contractor’s gross income, and therefore 1993-2 C.B. 294. been withheld and paid. Include in this box
not reportable on Form 1099-MISC, if the Indian Gaming Profits, Payments to gross royalties (before reduction for fees,
value of those tokens and farecards in any Tribal Members.—If you make payments commissions, or expenses) paid by a
month is $21 or less. If the value of a pass to members of Indian tribes from the net publisher directly to an author or literary
provided in a month is greater than $21, revenues of class II or class III gaming agent or paid by a literary agent to an
the full value is includible in gross income activities conducted or licensed by the author. Do not include surface royalties.
and therefore reportable on Form tribes, you must withhold Federal income They should be reported in box 1. Do not
1099-MISC. The value of parking may be tax on such payments and file Form report oil or gas payments for a working
excludable from the gross income of an 1099-MISC. interest in box 2; report payments for
independent contractor, and therefore not working interests in box 7. Do not report
reportable on Form 1099-MISC, if certain File Form 1099-MISC to report the timber royalties made under a pay-as-cut
requirements are met. See Notice 94-3, distributions to tribal members. Report the contract; report such timber royalties on
1994-1 C.B. 327, and Regulations sections payments in box 3, Other income, and the Form 1099-S.
1.132-1(b)(2), and 1.132-6(a), (b), and (d)(1). Federal income tax withheld in box 4. For
1995, when you provide a statement to the Box 3.—Enter other income required to
Independent Contractor or Employee.— tribal member, please also provide an be reported on Form 1099-MISC that
Generally, payments to independent explanation of the income and withholding. should not be reported in one of the other
contractors are reportable on Form boxes on the form.
1099-MISC in box 7. To help you Statements to Recipients.—For
information about the requirement of Enter in box 3 prizes and awards that
determine whether someone is an are not for services performed. Include the
independent contractor or an employee, furnishing a statement to each recipient,
see part H under General Instructions fair market value of merchandise won on
see Pub. 937, Employment Taxes. game shows. You must report prizes and
Note: To qualify for relief under section awards for employees on Form W-2. (See
530 of the Revenue Act of 1978 as 2nd TIN Not.—You may enter an “X” in the Instructions for Form W-2.) Report
extended by section 269(c) of P.L. 97-248, this box if you were notified by the IRS prizes and awards for services performed
about the employment tax status of twice within 3 calendar years that the by nonemployees, such as an award for
independent contractors and employees, payee provided an incorrect taxpayer the top commission salesperson, in box 7.
employers must file Form 1099-MISC. identification number (TIN). If you mark this
box, you will comply with a safe harbor Prizes and awards received in
Additional requirements for relief are recognition of past accomplishments in
discussed in Rev. Proc. 85-18, 1985-1 C.B. due diligence requirement of Temporary
Regulations section 35a.9999-3, Q/A-89, religious, charitable, scientific, artistic,
518. Also see Notice 87-19, 1987-1 C.B. educational, literary, or civic fields are not
455, for special rules that may apply to and the IRS will not send you any further
notices about this account. Also see reportable if (1) the winners are chosen
certain skilled workers, such as engineers, without action on their part, (2) the winners
designers, drafters, computer Regulations section 301.6724-1(g).
are not expected to perform future
programmers, and systems analysts, and Box 1.—Enter amounts paid to recipients services, AND (3) the payer transfers the
Rev. Rul. 87-41, 1987-1 C.B. 296. for all types of rents, such as real estate prize or award to a charitable organization
Directors’ Fees.—Directors’ fees and rentals paid for office space (unless paid to or governmental unit under a designation
other remuneration, including payments a real estate agent), machine rentals (for made by the recipient. See Rev. Proc.
made after retirement, are reportable on example, hiring a bulldozer to level your 87-54, 1987-2 C.B. 669.
Form 1099-MISC and must be reported in parking lot), and pasture rentals (for
example, farmers paying for the use of Other items required to be reported in
the year paid. Report them in box 7. box 3 include the following:
grazing land). If the machine rental is part
Commissions Paid to Lottery Ticket of a contract that includes both the use of 1. Punitive damages paid in cases that
Sales Agents.—A state that has control the machine and the operator, the rental do not involve physical injury or sickness
over and responsibility for on-line and should be prorated between the rent of the and any other taxable damages.
instant lottery games must file Form machine (reported in box 1) and the
1099-MISC to report commissions, 2. Payments to nonemployees specified
operator’s charge (reported as in, and payments similar to those specified
whether paid directly or indirectly, to nonemployee compensation in box 7).
licensed sales agents. For example, State in, Rev. Rul. 65-18, 1965-1 C.B. 32, about
Public housing agencies must report in payments to patients and members in
X retains control over and liability for box 1 rental assistance payments made to
on-line and instant lottery games. For Department of Veterans Affairs (VA)
owners of housing projects. See Rev. Rul. hospitals and domiciliaries under the VA
on-line ticket sales, State X pays 88-53, 1988-1 C.B. 384.
commissions by allowing an agent to retain therapeutic or rehabilitative program.
5% of the ticket proceeds the agent remits Coin-operated amusements.—If an 3. Payments as explained earlier under
to State X. For instant ticket sales, State X arrangement between an owner of Deceased Employee’s Wages Paid to
pays commissions by providing tickets to coin-operated amusements and an owner Estate or Beneficiary.
the agent for 5% less than the proceeds to of a business establishment where the
amusements are placed is a lease of the 4. Payments as explained earlier under
be obtained by the agent from the sale of Indian Gaming Profits, Payments to
those tickets. If the commissions for the amusements or the amusement space, the
owner of the amusements or the owner of Tribal Members.
year total $600 or more, they must be
the space, whoever makes the payments, Box 4.—Enter backup withholding. For
reported in box 7 on Form 1099-MISC. The
must report the lease payments in box 1 of example, persons who have not furnished
commissions are paid by State X to the
Form 1099-MISC if the payments total at their TIN to you become subject to
agent on the date payment is due from the
withholding at a 31% rate on payments insurance paid on behalf of a former 7. Payments to nonemployee
required to be reported in boxes 1, 2 (net employee (reported on Form W-2). entertainers for services.
of severance taxes), 3, 5 (to the extent Generally, amounts reportable in box 7 8. Exchanges of services between
paid in cash), 6, 7, 8, and 10 on this form. are subject to self-employment tax. If individuals in the course of their trades or
Also enter any income tax withheld from payments are not subject to this tax and businesses. For example, an attorney
payments to members of Indian tribes from they are not reportable elsewhere on Form represents a painter for nonpayment of
the net revenues of class II or class III 1099-MISC, report the payments in box 3. business debts in exchange for the
gaming activities conducted or licensed by If the following four conditions are met, a painting of the attorney’s law offices. The
the tribes. payment generally is reportable as amount reportable by each on Form
Box 5.—Enter the share of all proceeds nonemployee compensation: (1) you made 1099-MISC is the fair market value of his
from the sale of a catch or the fair market the payment to someone who is not your or her own services performed. However, if
value of a distribution in kind to each crew employee; (2) you made the payment for the attorney represents the painter in a
member of fishing boats with normally services in the course of your trade or divorce proceeding, the attorney must
fewer than 10 crewmembers. business (including government agencies report on Form 1099-MISC the value of his
and nonprofit organizations); (3) you made or her services, but the painter need not
Box 6.—Enter payments made in the report. The payment by the painter is not
course of your trade or business to each the payment to someone other than a
corporation, e.g., an individual or a made in the course of the painter’s trade
physician or other supplier or provider of or business, even though the painting
medical or health care services, including partnership; and (4) you made payments to
the payee of at least $600 during the year. services are of the type normally
payments made by medical and health performed in the course of the painter’s
care insurers under health, accident, and Examples of payments to be reported in trade or business.
sickness insurance programs. In the case box 7 are:
of a corporation, list the corporation as the 9. Taxable fringe benefits for
1. Professional service fees, such as nonemployees. For information on
recipient rather than the individual fees to attorneys, accountants, and
providing the services. See Rev. Ruls. valuation of fringe benefits, see Pub. 535,
architects. Business Expenses.
69-595, 1969-2 C.B. 242, and 70-608,
1970-2 C.B. 286. 2. Fees paid by one professional to 10. Gross oil and gas payments for a
another, such as fee-splitting or referral working interest.
The exemption from issuing Form fees.
1099-MISC to a corporation does not 11. Payments to current and former
apply to payments for medical or health 3. Payments by attorneys to witnesses self-employed insurance salespersons and
care services provided by corporations, or experts in legal adjudication. agents for (a) amounts paid after
including professional corporations. 4. Payment for services, including retirement, but calculated as a percentage
Box 7.—Enter nonemployee payment for parts or materials used to of commissions received by the individual
compensation. Include fees, commissions, perform the services as long as supplying from the paying company before
prizes and awards for services performed, the parts or materials was incidental to retirement; (b) renewal commissions; and
or other forms of compensation for providing the service. For example, report (c) deferred commissions paid after
services performed for your trade or the total insurance company payments to retirement but for sales made before
business by an individual who is not your an auto repair shop under a repair contract retirement.
employee. Include oil and gas payments showing an amount for labor and another 12. Directors’ fees as explained earlier
for a working interest, whether or not amount for parts, since furnishing parts under Directors’ Fees.
services are performed. Also include was incidental to repairing the auto.
13. Commissions paid to licensed lottery
expenses incurred for the use of an 5. Commissions paid to nonemployee ticket sales agents as explained earlier
entertainment facility that you treat as salespersons, subject to repayment but not under Commissions Paid to Lottery
compensation to a nonemployee. Do not repaid during the calendar year. Ticket Sales Agents.
report in box 7, nor elsewhere on Form 6. A fee paid to a nonemployee and
1099-MISC, PS 58 costs (reported on Example.—Ronald Barr is a building
travel reimbursement for which the contractor. He subcontracts the drywall
Form 1099-R); an employee’s wages, travel nonemployee did not account to the payer
or auto allowance, or bonuses (reported on work to Daniel Joseph, a sole proprietor
if the fee and reimbursement total at least who does business as ABC Drywall. During
Form W-2); or the cost of group-term life $600. the year, Mr. Barr pays Mr. Joseph
9595 VOID CORRECTED
PAYER’S name, street address, city, state, and ZIP code 1 Rents OMB No. 1545-0115
Ronald Barr 2 Royalties
XYZ Builders Miscellaneous
123 Maple Ave.
3 Other income
Oaktown, VA 22000
$ Form 1099-MISC
PAYER’S Federal identification number RECIPIENT’S identification number 4 Federal income tax withheld 5 Fishing boat proceeds
10-9999999 123-45-6789 $ $ For
RECIPIENT’S name 6 Medical and health care payments 7 Nonemployee compensation Internal Revenue
Daniel Joseph $ $ 5500.00 Service Center
ABC Drywall 8 Substitute payments in lieu of 9 Payer made direct sales of File with Form 1096.
dividends or interest $5,000 or more of consumer
Street address (including apt. no.) For Paperwork
products to a buyer
456 Flower Ln. $ (recipient) for resale Reduction Act
City, state, and ZIP code 10 Crop insurance proceeds 11 State income tax withheld instructions for
Oaktown, VA 22000 $ $ completing this form,
see Instructions for
Account number (optional) 2nd TIN Not. 12 State/Payer’s state number
Forms 1099, 1098,
5498, and W-2G.
Form 1099-MISC Cat. No. 14425J Department of the Treasury - Internal Revenue Service
Do NOT Cut or Separate Forms on This Page
$5,500.00. Mr. Barr must file Form letter showing this information along with during the calendar year, and if Form
1099-MISC because he paid Mr. Joseph commissions, prizes, awards, etc. 1099-OID amounts are proportional, you
$600 or more in the course of his trade or Box 10.—Enter crop insurance proceeds may treat all such certificates as one
business, and Mr. Joseph is not a paid to farmers by insurance companies, discount obligation and file a single Form
corporation. Form 1099-MISC is completed unless the farmer has informed the 1099-OID.
as shown above. insurance company that expenses have For time deposits and face-amount
Golden Parachute Payments.—A typical been capitalized under section 278, 263A, certificates, use the actual date of deposit
golden parachute payment is one made by or 447. and compute OID on a straight-line,
a corporation to a certain officer, Boxes 11 and 12.—These boxes, and monthly prorated basis for obligations
shareholder, or highly paid individual when Copies 1 and 2, are provided for your issued before July 2, 1982, and on a daily
a change in the ownership or control of the convenience only and need not be economic accrual basis for obligations
corporation occurs or when a change in completed for the IRS. If you withhold issued after July 1, 1982.
the ownership of a substantial part of the state income tax, you may enter it in box If you are a broker or middleman who
corporate assets occurs. See section 280G 11. In box 12, enter the abbreviated name holds a bank CD as nominee, whether or
for more information. of the state and the payer’s state not you sold the CD to the owner, you
In box 7, report any excess golden identification number, assigned by the must determine the amount of OID
parachute payments to a nonemployee. state. Use Copy 1 to provide information to includible in the income of the owner, if
Enter the letters “EPP” next to this the state, and Copy 2 as the recipient’s any, and report it on Form 1099-OID.
amount. Also enter the total compensation, copy for use in filing the state income tax Pub. 1212, List of Original Issue
including any golden parachute payments. return. Discount Instruments, contains information
Your entry should be in the following on certain outstanding publicly offered
format: discount obligations.
300000EPP Form 1099-OID
400000 Issuers of certain publicly offered debt
instruments having OID must file Form
Box 8.—Enter aggregate payments of at File Form 1099-OID, Original Issue 8281, Information Return for Publicly
least $10 received by a broker for a Discount, if the original issue discount Offered Original Issue Discount
customer in lieu of dividends or (OID) includible in gross income is at least Instruments, within 30 days after the date
tax-exempt interest as a result of the $10 and you are any of the following: of issuance. The information provided on
transfer of a customer’s securities for use (1) an issuer with any bond outstanding or that form will enable the IRS to update
in a short sale. File Form 1099-MISC with other evidence of indebtedness in Pub. 1212. See Form 8281 for details.
the IRS and furnish a copy to the customer registered or bearer form issued with OID;
for whom you received the payment. (2) an issuer of certificates of deposit (CDs) Exceptions.—You are not required to file
However, for substitute payments in lieu of made, purchased, or renewed after 1970 if Form 1099-OID for payments made to
dividends, do not file Form 1099-MISC nor the term of the obligation or deposit is certain payees including a corporation, a
furnish it to your customer if your customer more than 1 year; (3) a financial institution tax-exempt organization, an individual
is an individual, unless you have reason to having other deposit arrangements, such retirement arrangement (IRA), a U.S.
know on the record date of the dividend as time deposits or bonus-savings plans agency, a state, the District of Columbia, a
payment that such substitute dividend having a term in excess of 1 year provided U.S. possession, or a registered securities
payment is in lieu of (1) an exempt-interest the payment of interest is deferred until or commodities dealer.
dividend, (2) a capital gain dividend, (3) a maturity; (4) a broker or other middleman Do not report interest on U.S. Savings
return of capital, or (4) a dividend subject holding an OID obligation, including CDs, Bonds on this form. Report it on Form
to a foreign tax credit. File Form as nominee for the actual owner; or (5) a 1099-INT. Also report OID on obligations
1099-MISC for and furnish a copy to an real estate mortgage investment conduit with a term of 1 year or less on Form
individual for whom you received a (REMIC) or issuer of a collateralized debt 1099-INT.
payment in lieu of tax-exempt interest. If obligation (CDO). Also, file Form 1099-OID Statements to Recipients.—For an
you are not required to make a report on in any case in which you are required to explanation of the requirement to furnish
Form 1099-MISC for substitute dividends deduct and withhold taxes even if the an official form to recipients in person or
of at least $10, you must report the amount of the OID is less than $10. by statement mailing, see part H under
substitute dividends on Form 1099-DIV. Original Issue Discount.—Original issue General Instructions earlier. Also see Pub.
Substitute payment means a payment discount means the difference between the 1179.
in lieu of (1) tax-exempt interest to the stated redemption price at maturity and 2nd TIN Not.—You may enter an “X” in
extent that interest (including OID) has the issue price of a debt instrument. In the this box if you were notified by the IRS
accrued while the short sale was open and case of a stripped bond or coupon, OID is twice within 3 calendar years that the
(2) a dividend if the ex-dividend date is the difference between the stated payee provided an incorrect taxpayer
after the transfer of stock for use in a short redemption price at maturity and the identification number (TIN). If you mark this
sale and before the closing of the short acquisition price. A discount of less than 1⁄4 box, you will comply with a safe harbor
sale. of 1% of the stated redemption price at due diligence requirement of Temporary
For more information about reporting maturity, multiplied by the number of full Regulations section 35a.9999-3, Q/A-89,
substitute payments, see Regulations years from the date of issue to maturity, is and the IRS will not send you any further
section 1.6045-2. considered to be zero. notices about this account. Also see
Box 9.—Sales by you of $5,000 or more of Reporting OID.—You must prepare a Regulations section 301.6724-1(g).
consumer products to a person on a Form 1099-OID for each person who is a Box 1.—Report the OID on the obligation
buy-sell, deposit-commission, or other holder of record of the obligation if the OID for the part of the year it was owned by
commission basis for resale (by the buyer includible in the holder’s gross income is at the record holder. For REMICs and CDOs,
or any other person) anywhere other than least $10. see the discussion about REMICs and
in a permanent retail establishment. Enter For REMICs and CDOs, see the CDOs later.
an “X” in the checkbox in box 9. Do not discussion about REMICs and CDOs later. Box 2.—Enter any interest other than OID
enter a dollar amount here. Ordinarily, you will file only one Form paid or credited on this obligation during
If you are reporting an amount in box 7, 1099-OID for the depositor or holder of a the year. Some OID instruments pay
you may also check box 9 on the same particular obligation for the calendar year. regular interest, in addition to the OID, at
Form 1099-MISC. If a person holds more than one discount certain intervals during the life of the
The report you must give to the recipient obligation, issue separate Forms 1099-OID instrument. However, if OID is the only
for these direct sales need not be made on for each obligation. However, if a person interest on this obligation, leave this box
the official form. It may be in the form of a holds more than one certificate of the blank. Interest reported here must not be
same issue for the same period of time reported on Form 1099-INT. For REMICs
and CDOs, see the discussion about Statements to Holders.—For each Form the backup withholding rules regardless of
REMICs and CDOs later. 1099-OID you are required to file, you the amount of the payment. A cooperative
Box 3.—Enter amounts of interest or must furnish a statement to the REMIC determined to be primarily engaged in the
principal forfeited because of an early regular interest or CDO holder identified on retail sale of goods or services that are
withdrawal, such as an early withdrawal the form. The statement must contain the generally for personal, living, or family use
from a CD, that are deductible from gross information shown on Form 1099-OID, of the members may ask for and receive
income by the recipient. Do not reduce the including the legend shown on Copy B of exemption from filing Form 1099-PATR.
amounts in boxes 1 and 2 by the amount the official Form 1099-OID, and an See Form 3491, Consumer Cooperative
of the forfeiture. For detailed instructions indication that these items are being Exemption Application, for information
for determining the amount of forfeiture furnished to the IRS. The statement must about how to apply for this exemption.
deductible by the holder, see Rev. Ruls. also show the information specified in Report dividends paid on cooperatives’
75-20, 1975-1 C.B. 29, and 75-21, 1975-1 Regulations section 1.6049-7(f)(2)(ii). In capital stock on Form 1099-DIV.
C.B. 367. addition, the statement furnished by a
REMIC must show, for each calendar Statements to Recipients.—For an
Box 4.—Enter backup withholding. For quarter, the information specified in explanation of the requirement to furnish
example, persons who have not furnished Regulations section 1.6049-7(f)(3). Also see an official form to recipients in person or
their TIN to you in the manner required Regulations section 1.6049-7(f)(3)(ii) for by statement mailing, see part H under
become subject to withholding at a 31% information that may be required to be General Instructions earlier. Also see Pub.
rate on amounts required to be reported in reported to a real estate investment trust 1179.
boxes 1 and 2 (which may be reduced by (REIT) that holds a regular interest. 2nd TIN Not.—You may enter an “X” in
the amount reported in box 3) limited to this box if you were notified by the IRS
the cash paid on these obligations. A single-class REMIC (as defined in
Temporary Regulations section twice within 3 calendar years that the
Box 5.—Enter the CUSIP number, if any; if 1.67-3T(a)(2)(ii)) must include in the payee provided an incorrect taxpayer
there is no CUSIP number, the statement the investment expenses paid or identification number (TIN). If you mark this
abbreviation for the stock exchange, the accrued during each calendar quarter by box, you will comply with a safe harbor
abbreviation for the issuer used by the the REMIC for which the REMIC is allowed due diligence requirement of Temporary
stock exchange, the coupon rate, and the a deduction under section 212 and the Regulations section 35a.9999-3, Q/A-89,
year of maturity (e.g., NYSE XYZ 121⁄2 98). proportionate share of those investment and the IRS will not send you any further
If the issuer of the obligation is other than expenses allocated to the regular interest notices about this account. Also see
the payer, show the name of the issuer. holder. Regulations section 301.6724-1(g).
The statement must be furnished to Box 1.—Enter the total patronage
REMICs and Issuers of dividends paid in cash (qualified or
Collateralized Debt Obligations holders by March 15. To meet the
statement requirement, you may furnish a “consent” checks), qualified written notices
Real estate mortgage investment conduits copy of Form 1099-OID and a separate of allocation (face amount), and other
(REMICs), issuers of collateralized debt statement containing the additional property (except nonqualified written
obligations (CDOs), and any broker or information to the REMIC regular interest notices of allocation).
middleman who holds as a nominee a or CDO holder. Box 2.—Enter the total nonpatronage
REMIC regular interest or CDO must file For information about reporting income distributions paid in cash (qualified or
Form 1099-OID to report OID of $10 or to REMIC residual interest holders, see the “consent” checks), qualified written notices
more accrued to a REMIC regular interest instructions on Schedule Q (Form 1066), of allocation (face amount), and other
holder or a holder of a CDO. Also use Quarterly Notice to Residual Interest property (not including nonqualified written
Form 1099-OID to report other interest Holder of REMIC Taxable Income or Net notices of allocation). This box applies only
accrued to a REMIC regular interest holder Loss Allocation. to farmers’ cooperatives exempt from tax
during the year or paid to a holder of a under section 521.
CDO. Use Form 1099-INT to report interest Form 8811 and Reporting by Brokers or
Middlemen.—REMICs and issuers of Box 3.—Enter the total per-unit retain
if no OID is includible in the regular interest allocations paid in cash, qualified per-unit
holder’s or CDO holder’s income for the CDOs must also file Form 8811,
Information Return for Real Estate retain certificates (face amount), and other
Mortgage Investment Conduits (REMICs)
You are not required to file or issue and Issuers of Collateralized Debt Box 4.—Enter backup withholding. For
Form 1099-OID for exempt recipients Obligations, within 30 days after the example, persons who have not furnished
including the following holders of a REMIC startup day of the REMIC or issue date of their TIN to you in the manner required
regular interest or a CDO: a CDO. The IRS will use the information on become subject to withholding at a 31%
1. A corporation. Forms 8811 to publish Pub. 938, Real rate on payments required to be reported
2. A broker. Estate Mortgage Investment Conduits in boxes 1, 2, 3, and 5 to the extent such
(REMICs) Reporting Information, for use by payments are in cash or qualified check.
3. A middleman/nominee. certain brokers, middlemen, corporations, See Temporary Regulations section
4. A financial institution. and others specified in Regulations section 35a.9999-3, Q/A-10 for more information
5. An IRA. 1.6049-7(e)(4). on backup withholding by cooperatives.
6. A tax-exempt organization. For the requirements that a REMIC or Box 5.—Enter all redemptions of
CDO issuer or a broker or middleman who nonqualified written notices of allocation
For additional exempt recipients, see issued as patronage dividends,
Regulations section 1.6049-7(c). holds a REMIC regular interest or a CDO
furnish certain information on request, see nonqualified written notices of allocation
Box 1.—Report in box 1 the aggregate Regulations sections 1.6049-7(e) and issued as nonpatronage allocations
amount of OID includible in the gross 1.6049-7(f)(7). (applicable only to farmers’ cooperatives
income of each REMIC regular interest or qualifying under section 521), and
CDO holder for the period during the year nonqualified per-unit retain certificates,
for which the return is made. Form 1099-PATR issued with respect to marketing.
Box 2.—Report in box 2 any amount of Pass-Through Credits.—Report in the
interest, other than OID, accrued to each File Form 1099-PATR, Taxable appropriate boxes the patron’s share of
REMIC regular interest holder or paid to Distributions Received From unused credits that the cooperative is
each CDO holder. If you are a single-class Cooperatives, for each person to whom passing through to this patron:
REMIC (as defined in Temporary the cooperative has paid at least $10 in Box 6.—See the Note below.
Regulations section 1.67-3T(a)(2)(ii)), patronage dividends and other distributions
include in box 2 the regular interest described in section 6044(b) or from whom Box 7.—Energy investment credit.
holder’s share of investment expenses of you withheld any Federal income tax under Box 8.—Jobs credit.
the REMIC for the year.
Box 9.—Patron’s Alternative Minimum Tax distributions to beneficiaries of deceased the “Taxable amount not determined” box
Adjustments.—Enter the total alternative employees on Form 1099-R. Report in box 2b. But see the instructions for box
minimum tax (AMT) patronage dividend distributions to beneficiaries in boxes 1 2a for how to report the withdrawal of
adjustment for the patron and/or the total and 2a and use Code 4 in box 7. contributions under section 408(d)(4). Also
AMT per-unit retain allocation adjustment Charitable Gift Annuities.—If cash or see Direct Rollovers and Transfers below
for the patron. capital gain property is donated in for information on trustee-to-trustee
Note: If you are passing through other exchange for a charitable gift annuity, transfers. The direct rollover provisions do
credits, such as the Indian employment distributions from the annuity are not apply to distributions from IRAs and
credit, use box 6 or the blank box under reportable on Form 1099-R. Report in box SEPs.
boxes 8 and 9. Label the credit. 1 the total amount distributed during the IRA Revocation.—If an IRA is revoked
year. Report in box 2a the taxable amount. during its first 7 days (under Regulations
If any amount is taxable as a capital gain, section 1.408-6(d)(4)(ii)), the distribution
Form 1099-R report it in box 3. Report in box 5 any from the IRA must be reported. In addition,
nontaxable amount. Enter Code F in box 7. Form 5498 must be filed to report any
File Form 1099-R, Distributions From See Regulations section 1.1011-2(c) regular or rollover contribution to an IRA
Pensions, Annuities, Retirement or Example 8. that is revoked. Trustee-to-trustee transfers
Profit-Sharing Plans, IRAs, Insurance Life Insurance, Annuity, and Endowment from one IRA to another are not reportable
Contracts, etc., for each person to whom Contracts.—Report on Form 1099-R on either Form 5498 or Form 1099-R.
you have made any designated distribution payments of matured or redeemed annuity, If a regular contribution is made to an
from profit-sharing or retirement plans, endowment, and life insurance contracts. IRA that later is revoked, and distribution is
IRAs, annuities, pensions, insurance However, you need not file Form 1099-R to made to the taxpayer, enter the gross
contracts, survivor income benefit plans, report the surrender of a life insurance distribution in box 1 of Form 1099-R. If no
permanent and total disability payments contract if it is reasonable to believe that earnings are distributed, enter 0 (zero) in
under life insurance contracts, charitable none of the payment is includible in the box 2a and Code 8 in box 7. If earnings
gift annuities, etc., whether or not you income of the recipient. If you are reporting are distributed, enter the amount of
withheld Federal income tax. the surrender of a life insurance contract earnings in box 2a. Such earnings could
If part of the distribution is taxable and on Form 1099-R, enter Code 7 in box 7. be subject to the early distribution tax
part is nontaxable, file a Form 1099-R Also report premiums paid by a trustee under section 72(t). If they are subject to
reporting the entire distribution. However, if or custodian for current life or other that tax, enter Code 1 in box 7; if the
the total amount of the gross distribution insurance protection (PS 58 costs). PS 58 earnings are not subject to that tax, enter
paid to someone for the year is less than costs are not subject to the 10% early Code 8.
$1, a Form 1099-R need not be filed for distribution tax under section 72(t). Note: If you know that the taxpayer
that person. Section 1035 exchange.—A tax-free deducted the contribution, report the total
Also report death benefit payments section 1035 exchange is the exchange of amount distributed in box 2a and use the
made by employers that are not made as (1) a life insurance contract for another life appropriate code in box 7.
part of a pension, profit-sharing, or insurance, endowment, or annuity contract, If a rollover contribution is made to an
retirement plan. (See the instructions for (2) an endowment contract for an annuity IRA that later is revoked, and distribution is
box 1 later.) contract or for another endowment made to the taxpayer, enter in boxes 1 and
For loans from qualified plans, section contract that provides for regular payments 2a of Form 1099-R the gross distribution
403(a) annuity plans, section 403(b) to begin no later than they would have and the appropriate code in box 7. Follow
contracts, or modified endowment begun under the old contract, and (3) an this same procedure for a transfer from
contracts treated as distributions, see annuity contract for another annuity one IRA to another IRA that later is
sections 72(p) and 72(e)(4)(A). A deemed contract. However, the distribution of other revoked. The distribution could be subject
distribution under section 72(p) or 72(e)(4) property or the cancellation of a contract to the early distribution tax under section
could be an early distribution under section loan at the time of the exchange may be 72(t).
72(t) or 72(v), respectively. taxable and reportable on a separate Form If an employer SEP contribution is made
1099-R. and the SEP is revoked by the employee,
Generally, do not report payments
subject to withholding of social security These exchanges of contracts are report the distribution as fully taxable.
and Medicare taxes on this form. Report generally reportable on Form 1099-R. For more information, see Rev. Proc.
such payments on Form W-2. However, if (1) the exchange occurs within 91-70, 1991-2 C.B. 899.
the same company, (2) the exchange is
Reportable disability payments made DECs.—If you are reporting a total
solely a contract for contract exchange, as
from a retirement plan should be reported distribution from a plan that includes a
defined above, that does not result in a
on Form 1099-R. distribution of deductible voluntary
designated distribution, and (3) the
Do not report amounts totally exempt company maintains adequate records of employee contributions (DECs), file two
from tax such as workmen’s compensation the policyholder’s basis in the contracts, Forms 1099-R—one to report the
and Department of Veterans Affairs (VA) reporting on Form 1099-R is not required. distribution of DECs, the other to report
payments. For example, a life insurance contract the distribution from the other part of the
issued by Company X received in plan. Report the distribution of DECs in
Military Retirement Pay.—Payments to
exchange solely for another life insurance boxes 1 and 2a on the separate Form
military retirees are reportable on Form
contract previously issued by Company X 1099-R. However, for the direct rollover
1099-R. Military retirement pay awarded as
is not reportable on Form 1099-R as long (explained below) of funds that include
a property settlement to a former spouse is
as the company maintains the required DECs, file only one Form 1099-R to report
reportable on Form 1099-R under the
records. (See Rev. Proc. 92-26, 1992-1 the direct rollover of the entire amount. In
name and taxpayer identification number
C.B. 744.) this case, it is not necessary to report the
of the recipient, not those of the military
direct rollover of DECs on a separate Form
retiree. For those section 1035 exchanges that 1099-R.
Payments of survivor benefit annuities are reportable on Form 1099-R, enter the
total value of the contract in box 1, 0 (zero) Direct Rollovers and Transfers.—You
are also reportable on Form 1099-R.
in box 2a, the total premiums paid in box must report a direct rollover of an eligible
Nonqualified Plans.—Report any rollover distribution. A direct rollover is the
reportable distributions from commercial 5, and Code 6 in box 7.
direct payment of the distribution to an
annuities on Form 1099-R. Report IRA and SEP Distributions.—Distributions eligible retirement plan, including an IRA.
distributions to plan participants from from an individual retirement arrangement An eligible rollover distribution is the
nonqualified deferred compensation plans, (IRA) or simplified employee pension (SEP) taxable part of any distribution (including
including section 457 plans, on Form W-2, must be reported in boxes 1 and 2a net unrealized appreciation) from a
not on Form 1099-R. However, report regardless of the amount. You may mark qualified plan (or tax-sheltered annuity but
not an IRA) except (1) one of a series of withholding rules. Notice 92-48, 1992-2 For more information, see Rev. Proc.
substantially equal periodic payments (at C.B. 377, contains a model notice the plan 92-93, 1992-2 C.B. 505.
least annually) made for the life (or life administrator can use to satisfy this Failing the ADP or ACP Test After a
expectancy) of the employee or for the requirement. Notice 93-26 explains an Total Distribution.—If you make a total
joint lives (or life expectancies) of the exception to the 30-day rule and special distribution in 1995 and file a Form 1099-R
employee and the employee’s beneficiary rules for tax-sheltered (section 403(b)) with the IRS and then discover in 1996
or for a specified period of 10 years or annuities. that the plan failed either the section
more, and (2) any part of a distribution that Beneficiaries.—Prepare Form 1099-R 401(k)(3) ADP (actual deferral percentage)
is a minimum distribution required by using the name and taxpayer identification test for 1995 and you compute excess
section 401(a)(9). Other exceptions may number (TIN) of the beneficiary or estate, contributions or the section 401(m)(2) ACP
apply. See Codes G and H under Box 7 not those of the decedent. If there are (actual contribution percentage) test and
later. multiple beneficiaries, report on each Form you compute excess aggregate
Amounts paid under an annuity contract 1099-R only the amount paid to the contributions, you must recharacterize part
purchased for and distributed to a beneficiary whose name appears on the of the total distribution as excess
participant under a qualified plan can Form 1099-R, and enter the percentage in contributions or excess aggregate
qualify as eligible rollover distributions. box 9a, if applicable. contributions. First, file a CORRECTED
(See Notice 93-26, 1993-1 C.B. 308.) An Nonresident Aliens.—If income tax is Form 1099-R for 1995 for the correct
offset amount to repay a plan loan can be withheld under section 3405 on a amount of the total distribution (not
an eligible rollover distribution. An amount distribution to a nonresident alien, report including the amount recharacterized as
equal to the offset can be rolled over, but the distribution and withholding on Form excess contributions or excess aggregate
the plan is not required to permit a 1099-R. Also file Form 945, Annual Return contributions). Second, file a NEW Form
participant a direct rollover of an offset of Withheld Federal Income Tax, to report 1099-R for 1995 for the excess
amount. A deemed distribution of a plan the withholding. If income tax is withheld contributions or excess aggregate
loan under section 72(p) cannot be an under section 1441, report the distribution contributions.
eligible rollover distribution. (See Notice and withholding on Forms 1042 and To avoid a late filing penalty if the new
93-3, 1993-1 C.B. 293.) 1042-S. Form 1099-R is filed after the due date,
For information on withholding on eligible Corrective Distributions.—For reporting enter in the bottom margin of Form 1096
rollover distributions that are not direct the distribution of excess deferrals, excess the words “Filed To Correct Excess
rollovers, see Box 4 later. For more contributions, and excess aggregate Contributions.”
information on direct rollovers, see contributions, see Code 8 under Box 7 You should also issue copies of the
Temporary Regulations sections later. Forms 1099-R to the plan participant with
1.401(a)(31)-1T, 1.402(c)-2T, 1.402(f)-2T, an explanation of why these new forms are
1.403(b)-2T, and 31.3405(c)-1T. Excess Annual Additions Under Section
415.—You must report on Form 1099-R being issued.
Report a direct rollover in box 1 and 0 distributions made under Regulations Missing Participants.—The IRS
(zero) in box 2a. You do not have to report section 1.415-6(b)(6)(iv) of elective deferrals administers a letter-forwarding program
capital gain in box 3 or net unrealized or a return of employee contributions (and that could help plan administrators contact
appreciation in box 6. Prepare the form gains attributable to such employee missing retirement plan participants (or
using the name and social security number contributions) to reduce excess annual possibly their beneficiaries). To inform
of the person for whose benefit the funds additions arising from the allocation of individuals of their rights to benefits under
were rolled over (generally the participant), forfeitures, a reasonable error in estimating a retirement plan, the IRS will forward
not those of the trustee of the IRA or other a participant’s compensation, or a letters from plan administrators to the
plan to which the funds were rolled. reasonable error in determining the amount missing individuals if the administrators
If part of the distribution is a direct of elective deferrals that may be made for provide the names and social security
rollover and part is distributed to the an individual under the limits of section numbers of the missing individuals.
recipient, prepare two Forms 1099-R. 415. However, the IRS cannot disclose
Do not report transfers between Such distributions are not eligible individuals’ addresses or give confirmation
trustees or issuers (unless they are direct rollover distributions although they are of letter delivery. All undelivered letters will
rollovers from qualified plans) that involve subject to income tax withholding under be destroyed.
no payment or distribution of funds to the section 3405. They are not subject to For further information, see Rev. Proc.
participant including a trustee-to-trustee social security, Medicare, or Federal 94-22, 1994-1 C.B. 608, or contact the
transfer from one IRA to another or one Unemployment Tax Act (FUTA) taxes. In Disclosure Officer at your IRS district
tax-sheltered (section 403(b)) arrangement addition, such distributions are not subject office.
to another. However, a trustee-to-trustee to the early distributions tax under section Filer.—The payer or plan administrator
transfer from a conduit IRA to a qualified 72(t) nor the excess distributions tax under must file Form 1099-R using the same
plan is considered a distribution and section 4980A. name and employer identification number
subsequent rollover and must be reported. You may report the distribution of used to deposit any tax withheld and to file
You may have to report exchanges of elective deferrals and employee the annual withholding tax return (Form
insurance contracts, including an exchange contributions (and gains attributable to 945).
under section 1035, under which any such employee contributions) on the same Statements to Recipients.—For
designated distribution may be made. For Form 1099-R. However, if other information about the requirement to
a section 1035 exchange that is in part distributions are made during the year, furnish a statement to each recipient, see
taxable, file a separate Form 1099-R to they must be reported on a separate Form part H under General Instructions earlier.
report the taxable amount. See Section 1099-R. Because the distribution of
1035 exchange earlier. elective deferrals is fully taxable (no part of Box 1.—Enter the total amount of the
the distribution is a return of the distribution before income tax or other
Explanation to Recipients Before Eligible deductions were withheld. Include direct
Rollover Distributions (Section 402(f) investment in the contract), report the total
amount of the distribution in boxes 1 and rollovers, premiums paid by a trustee or
Notice).—No more than 90 days and no custodian for current life or other insurance
fewer than 30 days before making an 2a. Leave box 5 blank, and enter Code E
in box 7. For a return of employee protection (PS 58 costs), and the gross
eligible rollover distribution, the plan amount of IRA or SEP distributions in this
administrator must provide a written contributions plus gains, enter the gross
distribution in box 1, the gains attributable box. However, in the case of a distribution
explanation to the recipient. The plan by a trust representing CDs redeemed
administrator must explain the rollover to the employee contributions being
returned in box 2a, and the employee early, report the net amount distributed.
rules, the special tax treatment for Also, see Box 6.
lump-sum distributions, the direct rollover contributions being returned in box 5.
option, and the mandatory 20% Enter Code E in box 7.
box 1 is a total distribution. A total
Example for Computing Amount Eligible for Capital Gain Election (See distribution is one or more distributions
Box 3.) within 1 tax year in which the entire
Step I: Total Taxable Amount balance of the account is distributed. Any
distribution that does not meet this
Total distribution XXXXX definition is not a total distribution. If
Less: 1. Current actuarial value of any annuity XXXXX periodic or installment payments are made,
mark this box in the year the final payment
2. Employee contributions (minus any amounts previously is made.
distributed that were not includible in the employee’s
gross income) XXXXX Box 3.—For lump-sum distributions from
qualified plans only, enter the amount in
3. Net unrealized appreciation in the value of any employer box 2a eligible for the capital gain election
securities that were a part of the lump-sum distribution XXXXX XXXXX under section 1122(h)(3) of the Tax Reform
Total taxable amount XXXXX Act of 1986 for participants born before
1936 (or their beneficiaries). Enter the full
Step II: Capital Gain amount eligible for the capital gain
Total taxable amount Months of active participation before 1974 Capital election. You should not complete this box
(from Step I) = gain for a direct rollover.
Total months of active participation
To compute the months of an
employee’s active participation before
Include in this box the value of U.S. 403(b), and the annuity starting date is 1974, count as 12 months any part of a
Savings Bonds distributed from the plan. after July 1, 1986, you may elect to use a calendar year in which an employee
Enter the appropriate taxable amount in simplified safe harbor method to compute actively participated under the plan; for
box 2a. Please furnish a statement to the the taxable amount. However, for purposes active participation after 1973, count as
plan participant showing the value of each of computing the taxable amount to enter 1 month any part of a month in which the
bond at the time of distribution. This will in box 2a, assume the distribution is not employee actively participated under the
provide him or her with the information eligible for the death benefit exclusion. See plan. See the example at the top of this
necessary to figure the interest income on Notice 88-118, 1988-2 C.B. 450. page.
each bond when it is redeemed. Generally, you are not required to Active participation begins with the first
In addition to reporting death benefit compute the taxable amount of an IRA or month in which an employee became a
payments made from a plan, report here SEP nor designate whether any part of a participant under the plan and ends with
any death benefit payments made by distribution is a return of basis attributable the earliest of:
employers that are not made as part of a to nondeductible contributions. Therefore, 1. The month in which the employee
pension, profit-sharing, or retirement plan. report the total amount distributed from an received a lump-sum distribution under the
Also enter this amount in box 2a. Enter IRA or SEP in box 2a. This will be the plan;
Code 4 in box 7. For example, the board same amount reported in box 1. You may
of directors of XYZ Corporation votes to mark the “Taxable amount not determined” 2. In the case of an employee, other
pay the widow of one of its employees a box in box 2b. However, in the case of a than a self-employed person or
lump-sum “death benefit.” This amount distribution by a trust representing CDs owner-employee, the month in which the
must be reported in boxes 1 and 2a, and redeemed early, report the net amount employee separates from service;
Code 4 must be shown in box 7. distributed. Do not include any amount 3. The month in which the employee
For a section 1035 exchange, see paid for IRA insurance protection in this dies; or
Section 1035 exchange under Life box. For a distribution of contributions plus 4. For a self-employed person or
Insurance, Annuity, and Endowment earnings from an IRA under section owner-employee, the first month in which
Contracts earlier. 408(d)(4) (previously excess contributions), the employee becomes disabled (within the
report the gross distribution in box 1 and meaning of section 72(m)(7)).
Box 2a.—Generally, you must enter the only the earnings in box 2a, and enter
amount includible as income. However, if Code 8 or P, whichever is applicable, in For a charitable gift annuity, see
you are unable to reasonably obtain the box 7. For a distribution of contributions Charitable Gift Annuities earlier.
data needed to compute the taxable without earnings after the due date of the Box 4.—Enter any Federal income tax
amount, leave this box blank. Do not individual’s return, under section 408(d)(5), withheld. This withholding is subject to
include excludable or tax-deferred enter 0 (zero). Include DEC distributions in deposit rules, and the withholding tax
amounts reportable in boxes 5, 6, and 8. this box. return is Form 945, Annual Return of
For a direct rollover from a qualified plan Losses.—If a distribution is a loss, do not Withheld Federal Income Tax.
or tax-sheltered annuity or for a nontaxable enter a negative amount in this box. For Note: The amount withheld cannot be
section 1035 exchange of life insurance, example, if stock is distributed but the more than the sum of the cash and the fair
annuity, or endowment contracts, enter 0 value is less than the employee’s aftertax market value of property (excluding
(zero) in box 2a. contributions, enter the value of the stock employer securities) received in the
Include PS 58 costs that were reported in box 1, leave box 2a blank, and enter the distribution.
in box 1. However, do not report PS 58 employee’s contributions in box 5. For periodic payments that are not
costs and a distribution on the same Form Box 2b—Taxable amount not eligible rollover distributions, withhold on
1099-R. Use a separate Form 1099-R for determined.—Enter an “X” in this box only the taxable part as though the periodic
each. Enter Code 9 in box 7 for PS 58 if you are unable to reasonably obtain the payments were wages, based on the
costs. See Regulations section 1.72-16(b) data needed to compute the taxable recipient’s Form W-4P, Withholding
and Rev. Ruls. 55-747, 1955-2 C.B. 228, amount. If you mark this box, leave box 2a Certificate for Pension or Annuity
and 66-110, 1966-1 C.B. 12, for blank unless you are reporting an IRA Payments. The recipient may request
information on the cost of premiums paid distribution. Please make every effort to additional withholding on Form W-4P or
by an employees’ trust under a qualified compute the taxable amount. See Notice claim exemption from withholding. If a
plan for current life insurance protection 88-118 for the simplified safe harbor recipient does not submit a Form W-4P,
taxable to plan participants or their method of computing certain taxable withhold by treating the recipient as
beneficiaries. amounts for certain life annuity married with three withholding allowances.
If you made periodic life annuity distributions from qualified plans and See Circular E, Employer’s Tax Guide, for
distributions from a qualified employee tax-sheltered (section 403(b)) annuities. wage withholding tables.
plan under section 401(a), from an Box 2b—Total distribution.—Enter an “X” Note: Rather than Form W-4P, military
employee annuity under section 403(a), or in this box only if the payment shown in retirees should give you Form W-4,
from an annuity contract under section
Employee’s Withholding Allowance contribution to a retirement plan that was to an IRA for the surviving spouse of a
Certificate. not an aftertax contribution. deceased participant, enter Codes 4 and
Withhold 10% of the taxable part of a Generally, for qualified plans, G. Do not use Code 4 with Code H.
nonperiodic distribution that is not an tax-sheltered annuities, and nonqualified Only two numeric combinations are
eligible rollover distribution. The recipient commercial annuities, enter in box 5 the permitted: Codes 8 and 1, or 8 and 2. If
may request additional withholding on employee contributions or insurance two other numeric codes are applicable,
Form W-4P or claim exemption from premiums recovered tax free during the you must file more than one Form 1099-R.
withholding. year based on the method you used to For example, if part of a distribution is
If a payee fails to furnish his or her determine the taxable amount to be premature (Code 1) and part is not, one
correct TIN to you in the manner required, entered in box 2a. If periodic payments Form 1099-R must be filed for the part to
or if the IRS notifies you before any began before 1993, you are not required which Code 1 applies and another Form
distribution that the TIN furnished is to, but you are encouraged to, report in 1099-R for the part that is a normal
incorrect, a payee cannot claim exemption box 5. Also, you may have to report the distribution, Code 7. In addition, for the
from withholding. Backup withholding does total employee contributions in box 9b. distribution of excess deferrals, excess
not apply. See Box 9b later. contributions, or excess aggregate
If a total distribution is made, the total contributions, parts of the distribution may
Withhold 20% of an eligible rollover be taxable in two or three different years.
distribution from a qualified plan that is employee contributions or insurance
premiums available to be recovered tax Thus, separate Forms 1099-R must be
not a direct rollover. A recipient cannot filed using Code 8, P, or D to indicate the
claim exemption from withholding for such free must be shown only in box 5. If any
previous distributions were made, any year the amount is taxable.
a distribution; however, no withholding is
required for a direct rollover. Although the amount recovered tax free in prior years If part of an eligible rollover distribution
same rules generally apply to an eligible must not appear in box 5. See Box 9b is paid in a direct rollover and part is not,
rollover distribution from a tax-sheltered later for more information about reporting you must file a separate Form 1099-R for
annuity, a special effective date may apply. total employee contributions. each part showing the appropriate code on
Any net unrealized appreciation excludable If you are unable to reasonably obtain each form. If part of a distribution is an
from gross income under section 402(e)(4) the data necessary to compute the taxable eligible rollover distribution and part is not
is not included in the amount of any amount, leave boxes 2a and 5 blank, and (e.g., a minimum distribution required by
eligible rollover distribution that is subject mark the box in box 2b. section 401(a)(9)) and the part that is an
to 20% withholding. (See Notice 93-3.) eligible rollover distribution is directly rolled
For more information, see Rev. Proc. over, you must file a separate Form
You are not required to withhold 20% of 92-86, 1992-2 C.B. 495.
an eligible rollover distribution that, when 1099-R to report each part.
aggregated with other eligible rollover For charitable gift annuities, see Codes.—
distributions made to one person during Charitable Gift Annuities earlier.
1—Early (premature) distribution, no
the year, is less than $200. Form W-4P is Box 6.—Use this box if a distribution known exception. Use Code 1 only if the
not required for an eligible rollover includes securities of the employer employee/taxpayer has not reached age
distribution since 20% withholding is corporation (or a subsidiary or parent 591⁄2, and only if none of the exceptions
mandatory. corporation) and you can compute the net under section 72(q), (t), or (v) are known to
The 20% withholding does not apply to unrealized appreciation (NUA) in the apply. For example, if a hardship
distributions from IRAs. For purposes of employer’s securities. Enter all the NUA in distribution is made for medical expenses,
withholding, assume that the entire amount employer securities if this is a lump-sum you probably will not know if the medical
of an IRA distribution is taxable (except for distribution. If this is not a lump-sum expense exception under section 72(t)
the distribution of contributions under distribution, enter only the NUA in applies. Therefore, use Code 1.
sections 408(d)(4), in which only the employer securities attributable to
employee contributions. See Regulations 2—Early (premature) distribution,
earnings are taxable, and 408(d)(5)). exception applies (as defined in section
section 1.402(a)-1(b) for the determination
Even though you may be using Code 1 of the NUA. Also see Notice 89-25 (Q/A-1), 72(q), (t), or (v)). Use Code 2 only if the
in box 7 to designate an early distribution 1989-1 C.B. 662. Include the NUA in box 1 employee/taxpayer has not reached age
subject to the 10% tax specified in but not in box 2a. You do not have to 591⁄2 to indicate that an exception under
sections 72(q), (t), or (v), you are not complete this box for a direct rollover. 72(q), (t), or (v) applies. However, instead
required to withhold that tax. of Code 2, use Code 3 or 4, whichever
Box 7.—Enter the appropriate code(s) applies, for an early distribution due to
See Cir. E and the Instructions for from the list below that shows the type of
Form 945 for more withholding disability or death.
distribution being made. Also, enter an “X”
information. in the IRA/SEP checkbox if the distribution 3—Disability.
Box 5.—Enter the employee’s is from an IRA or SEP. 4—Death. Use Code 4 regardless of the
contributions to a profit-sharing or Read the codes carefully and enter the age of the employee/taxpayer to indicate
retirement plan, or insurance premiums. appropriate codes accurately because the payment to a decedent’s beneficiary,
The entry in box 5 can include the tax-free IRS uses the codes to help determine including an estate or trust. Also use it for
part of any of the following: whether the recipient has properly reported death benefit payments made by an
(a) contributions actually made by the the distribution. If the codes you enter are employer but not made as part of a
employee over the years under the incorrect, the IRS may improperly propose pension, profit-sharing, or retirement plan.
retirement or profit-sharing plan that were changes to the recipient’s taxes. 5—Prohibited transaction.
required to be included in the income of
the employee when contributed (“aftertax Use the codes below for distributions 6—Section 1035 exchange. Use Code 6
contributions”), (b) contributions made by from IRAs, SEPs, Keoghs, qualified plans, to indicate the tax-free exchange of life
the employer but considered to have been commercial annuities, insurance contracts, insurance, annuity, or endowment
contributed by the employee under section etc. contracts under section 1035.
72(f), (c) the accumulated cost of A numeric code must be entered, 7—Normal distribution. Use Code 7 for a
premiums paid for life insurance protection, except when Code P, D, E, F, G, or H is normal distribution from any plan, including
taxable to the employee in previous years used. When applicable, you may enter a an IRA or SEP, if the employee/taxpayer is
and in the current year under Regulations numeric and an alpha code. For example, at least 591⁄2. Also use Code 7 to report a
section 1.72-16 (PS 58 costs) (only if the when using a Code P for an IRA distribution from a life insurance, annuity,
life insurance contract itself is distributed), distribution under section 408(d)(4), you or endowment contract and for reporting
and (d) premiums paid on commercial may also enter Code 1, if it applies. Or for income from a failed life insurance contract
annuities. Do not include contributions to a normal distribution from a qualified plan under section 7702(g) and (h). (See Rev.
IRAs, SEPs, DECs, 401(k) plans, or any that qualifies for 5- or 10-year averaging, Rul. 91-17, 1991-1 C.B. 190.) Generally,
enter Codes 7 and A. For a direct rollover use Code 7 if no other code applies.
8—Excess contributions plus property (not including the annuity transferor may receive gross proceeds that
earnings/excess deferrals (and/or contract) distributed. cannot be determined with certainty under
earnings) taxable in 1995. Use Code 8 for If an annuity contract is part of a the regulations and is not included in gross
an IRA distribution under section 408(d)(4), multiple recipient lump-sum distribution, proceeds.
unless Code P applies. Also use this code enter in box 8, along with the current Reportable Real Estate.—Generally,
for corrective distributions of excess actuarial value, the percentage of the total reporting is required if the transaction
deferrals, excess contributions, and excess annuity contract each Form 1099-R consists in whole or in part of the sale or
aggregate contributions, unless Code P or represents. exchange for money, indebtedness,
D applies. For information about reporting property, or services, of any present or
corrective distributions, see Notice 89-32, Box 9a.—If this is a total distribution and it
is made to more than one person, enter future ownership interest in any of the
1989-1 C.B. 671; Notice 88-33, 1988-1 following:
C.B. 513; and Notice 87-77, 1987-2 C.B. the percentage received by the person
385. (Notice 88-33 was modified by Rev. whose name appears on Form 1099-R. 1. Improved or unimproved land,
Proc. 91-44, 1991-2 C.B. 733, to provide You need not complete this box for IRA or including air space.
that the income allocable to an excess SEP distributions or for a direct rollover. 2. Inherently permanent structures,
contribution to a SARSEP (salary reduction Box 9b.—If a distribution is payable in the including any residential, commercial, or
simplified employee pension) is includible form of a life annuity eligible for the industrial building.
in gross income in the year withdrawn from simplified safe harbor method under Notice 3. A condominium unit and its
the IRA.) Also see IRA Revocation earlier. 88-118 (qualified plans and tax-sheltered appurtenant fixtures and common
9—PS 58 costs. Use Code 9 to report (section 403(b)) annuities), you must also elements, including land.
premiums paid by a trustee or custodian report the total employee contributions
remaining to be recovered tax free. Report 4. Stock in a cooperative housing
for current life or other insurance corporation (as defined in section 216).
protection (PS 58 costs). See Box 2a for the total employee contributions only in the
year periodic payments begin. Sale or exchange.—A sale or exchange
If any previous distributions were made, includes any transaction properly treated
P—Excess contributions plus earnings/ as a sale or exchange for Federal income
excess deferrals taxable in 1994. See the any amount recovered tax free in prior
years must not appear in this box. In tax purposes, even if the transaction is not
explanation for Code 8. The IRS suggests currently taxable. For example, a sale of a
that anyone using Code P for the refund of addition, you need not report the total
employee contributions if the distribution is principal residence is a reportable sale
an IRA contribution under section 408(d)(4) even though the transferor may be entitled
advise payees, at the time the distribution not eligible for the simplified safe harbor
method under Notice 88-118. to defer recognition of the gain on the sale
is made, that the earnings are taxable in because of the purchase of a new
the year in which the contribution was For a total distribution, the total residence under section 1034 or because
made. employee contributions must be shown the transferor is entitled to exclude the
A—May be eligible for 5- or 10-year only in box 5. See Box 5 earlier. gain under section 121 because of being
averaging. Use Code A to indicate that the Boxes 10–15.—These boxes and Copies 1 age 55. Likewise, a transfer to a
distribution is eligible for the averaging and 2 are provided for your convenience corporation that qualifies for
method of computing the tax on lump-sum only and need not be completed for the nonrecognition of gain under section 351 is
distributions under section 402(d). To IRS. Use the state and local information a reportable exchange. In addition, a
determine whether the distribution may be boxes to report distributions and taxes for transfer under a land contract is reportable
eligible for averaging, you need not two states or localities. Keep the in the year in which the parties enter into
consider whether the recipient used information for each state or locality the contract.
averaging (or capital gain treatment) in the separated by the broken line. If state or Ownership interest.—An ownership
past. local income tax has been withheld on this interest includes fee simple interests, life
B—May be eligible for death benefit distribution, you may enter it in boxes 10 estates, reversions, remainders, and
exclusion. Use Code B to indicate that the and 13, as appropriate. In box 11, enter perpetual easements. It also includes any
distribution is eligible for the death benefit the abbreviated name of the state and the previously created rights to possession or
exclusion under section 101(b). payer’s state identification number. The use for all or part of any particular year,
state number is the payer’s identification e.g., a leasehold, easement, or timeshare,
C—May be eligible for both A and B. number assigned by the individual state. In if such rights have a remaining term of at
D—Excess contributions plus box 14, enter the name of the locality. In least 30 years, including any period for
earnings/excess deferrals taxable in boxes 12 and 15 you may enter the which the holder may renew such rights,
1993. See the explanation for Code 8. amount of the state or local distribution. determined on the date of closing. For
E—Excess annual additions under Copy 1 may be used to provide example, a preexisting leasehold on a
section 415. Use Code E alone. Do not information to the state or local tax building with an original term of 99 years
use Code 1 or 2 with Code E. department, and Copy 2 may be used as and a remaining term of 35 years on the
the recipient’s copy for use in filing a state closing date is an ownership interest;
F—Charitable gift annuity. or local income tax return. however, if the remaining term is 10 years,
G—Direct rollover to IRA. Do not use this it is not an ownership interest. An
code for a distribution from an IRA. Do not ownership interest does not include any
use this code with any other code except Form 1099-S option to acquire real estate.
Code 4, when applicable.
Involuntary conversion.—A sale of real
H—Direct rollover to qualified plan or File Form 1099-S, Proceeds From Real estate under threat or imminence of
tax-sheltered annuity. Do not use this Estate Transactions, to report the sale or seizure, requisition, or condemnation is
code with any other code. exchange of real estate. generally a reportable transaction.
Box 8.—Enter the current actuarial value Note: You are not required to indicate on Exceptions.—The following is a list of
of an annuity contract that is a part of a Form 1099-S that the transferor’s (seller’s) transactions that are not reportable.
lump-sum distribution. Do not include this financing was Federally subsidized. Also, However, you may choose to report them;
item in boxes 1 and 2a. you are not required to enter (1) both total but if you do, the return filed and the
To determine the value of an annuity gross proceeds and the allocated gross statement furnished to the transferor must
contract, show the value as an amount proceeds for a multiple transferor comply with the reporting rules.
equal to the current actuarial value of the transaction (enter either one or the other);
(2) an indication that the transferor may 1. Any transaction in which the transferor
annuity contract, reduced by an amount is a corporation (or is considered to be a
equal to the excess of the employee’s receive property or services for an
obligation having a stated principal amount; corporation under Regulations section
contributions over the cash and other 1.6045-4(d)(2)), a governmental unit,
or (3) an indication that, in connection with
a contingent payment transaction, the including a foreign government or an
international organization, or an exempt person required to file Form 1099-S is funds, the mortgage lender is the one who
volume transferor. Under this rule, if there explained in 2 below. However, you may has the security interest that is most senior
are exempt and nonexempt transferors, designate the person required to file Form in priority. Amounts advanced by the
you must file Form 1099-S only for the 1099-S in a written agreement, as transferor are not treated as new funds.
nonexempt transferors. explained under 3 below. b. Transferor’s broker means the
Exempt volume transferor.—An exempt Note: For each transaction, please be sure broker who contracts with the transferor
volume transferor is someone who sold or that only one person is responsible for and who is compensated for the
exchanged during the year, who expects filing and that only one Form 1099-S is transaction.
to sell or exchange during the year, or who filed for each transferor. c. Transferee’s broker means the
did sell or exchange in either of the 2 1. If you are the person responsible for broker who significantly participates in the
previous years, at least 25 separate items closing the transaction, you must file preparation of the offer to acquire the
of reportable real estate to at least 25 Form 1099-S. If a Uniform Settlement property or who presents such offer to the
separate transferees. In addition, each item Statement, prescribed under the Real transferor. If there is more than one such
of reportable real estate must have been Estate Settlement Procedures Act of 1974 person, the transferee’s broker is the one
held, at the date of closing, or will be held, (RESPA), is used, the person responsible who most significantly participates in the
primarily for sale or resale to customers in for closing is the person listed as the preparation of the acquisition offer. If there
the ordinary course of a trade or business. settlement agent on that statement. A is no such person, the one who most
You are not required to report an exempt Uniform Settlement Statement includes any significantly participates in the presentation
volume transferor’s transactions if you amendments, variations, or substitutions of the offer is the transferee’s broker.
receive the penalties of perjury certification that may be prescribed under RESPA if
required by Regulations section d. Transferee means the person who
any such form requires disclosure of the acquires the greatest interest in the
1.6045-4(d)(3). transferor and transferee, the application of property. If no one acquires the greatest
2. Any transaction that is not a sale or the proceeds, and the name of the interest, the transferee is the person listed
exchange, including a bequest, a gift settlement agent or other person first on the ownership transfer documents.
(including a transaction treated as a gift responsible for preparing the settlement
under section 1041), and a financing or statement. 3. Designation agreement.—You can
refinancing that is not related to the enter into a designation agreement at or
If a Uniform Settlement Statement is not before closing to designate who must file
acquisition of real estate. used, or no settlement agent is listed, the Form 1099-S for the transaction. The
3. A transfer in full or partial satisfaction person responsible for closing is the agreement will identify the person
of a debt secured by the property. This person who prepares the closing responsible for filing if such designated
includes a foreclosure, a transfer in lieu of statement, including a settlement person signs the agreement. It is not
foreclosure, or an abandonment. statement or other written document that necessary that all parties to the transaction
4. A de minimis transfer for less than identifies the transferor, transferee, and (or that more than one party) enter into the
$600. A transaction is de minimis if it can real estate transferred, and that describes agreement.
be determined with certainty that the total how the proceeds are to be disbursed.
You may be designated in the
money, services, and property received or If no closing statement is used, or if two agreement as the person who must file if
to be received is less than $600, as or more statements are used, the person you are the person responsible for closing
measured on the closing date. For responsible for closing is, in the following (as explained in 1 above), the transferee’s
example, if a contract for sale provides for order: (a) the transferee’s attorney if the or transferor’s attorney (as explained in 1
total consideration of “$1.00 plus other attorney is present at the delivery of either above), a title or escrow company that is
valuable consideration,” the transfer is not the transferee’s note or a significant part of most significant in terms of the gross
a de minimis transfer unless you can the cash proceeds to the transferor or if proceeds disbursed, or the mortgage
determine that the “other valuable the attorney prepares or reviews the lender (as explained in 2a above).
consideration” is less than $599, as preparation of the documents transferring
measured on the closing date. The $600 legal or equitable ownership; (b) the The designation agreement may be in
rule applies to the transaction as a whole, transferor’s attorney if the attorney is any form and may be included on the
not separately to each transferor. present at the delivery of either the closing statement. It must identify by name
transferee’s note or a significant part of the and address the person designated as the
The following are also not reportable if person responsible for filing; it must
the transaction is not related to the sale or cash proceeds to the transferor or if the
attorney prepares or reviews the include the names and addresses of each
exchange of reportable real estate: person entering into the agreement; it must
preparation of the documents transferring
1. An interest in crops or surface or legal or equitable ownership; or (c) the be signed and dated by all persons
subsurface natural resources, i.e., timber, disbursing title or escrow company that is entering into the agreement; it must
water, ores, and other natural deposits, most significant in disbursing gross include the names and addresses of the
whether or not such crops or natural proceeds. If there is more than one transferor and transferee; and it must
resources are severed from the land. attorney described in (a) or (b), the one include the address and any other
2. A burial plot or vault. whose involvement is most significant is information necessary to identify the
the person responsible for filing. property. Each person who signs the
3. A manufactured structure used as a agreement must retain it for 4 years.
dwelling that is manufactured and 2. If no one is responsible for closing the
assembled at a location different from that transaction as explained in 1 above, the Employees, Agents, and Partners.—If an
where it is used, but only if such structure person responsible for filing is, in the employee, agent, or partner, acting within
is not affixed, on the closing date, to a following order: (a) the mortgage lender, the scope of such person’s employment,
foundation. This exception applies to an (b) the transferor’s broker, (c) the agency, or partnership, participates in a
unaffixed mobile home. transferee’s broker, or (d) the transferee. real estate transaction, only the employer,
principal, or partnership (not the employee,
Timber Royalties.—Report on Form For purposes of 2 above, apply the agent, or partner) may be the reporting
1099-S payments of timber royalties made following definitions: person. However, the participation of a
under a pay-as-cut contract, reportable a. Mortgage lender means a person person listed on the Uniform Settlement
under section 6050N. For more who lends new funds in connection with Statement as the settlement agent acting
information, see Announcement 90-129, the transaction, but only if the loan is at as an agent of another is not attributed to
1990-48 I.R.B. 10. least partially secured by the real estate. If the principal.
Gross Proceeds.—See Box 2 later. there is more than one lender, the one who Foreign Transferors.—Sales or exchanges
Who Must File.—Generally, the person lends the most new funds is the mortgage involving foreign transferors are reportable
responsible for closing, as explained in 1 lender. If several lenders advance equal on Form 1099-S. For information on the
below, is required to file Form 1099-S. If amounts of new funds, and no other transferee’s responsibility to withhold
no one is responsible for closing, the person advances a greater amount of new income tax when a U.S. real property
interest is acquired from a foreign person, separate mailing. Rather, it may be made property subject to a liability, such liability
see Pub. 515, Withholding of Tax on in person or in a mailing that includes is treated as cash and is includible as part
Nonresident Aliens and Foreign other items. The transferor is required to of gross proceeds. For a contingent
Corporations, and Form 8288, U.S. furnish his or her TIN and to certify that the payment transaction, include the maximum
Withholding Tax Return for Dispositions by TIN is correct. determinable proceeds. Also see Multiple
Foreign Persons of U.S. Real Property You may request a TIN on Form W-9, Assets Sold earlier.
Interests. Request for Taxpayer Identification If you are reporting a like-kind exchange
Multiple Transferors.—For multiple Number and Certification. Alternatively, you of property for which no gross proceeds
transferors of the same real estate, you may provide a written statement to the are reportable, enter 0 (zero) in box 2 and
must file a separate Form 1099-S for each transferor similar to the following: “You are mark the checkbox in box 4.
transferor. At or before closing, you must required by law to provide [insert name of Gross proceeds do not include the value
request from the transferors an allocation person responsible for filing] with your of property or services received or to be
of the gross proceeds among the correct taxpayer identification number. If received by, or on behalf of, the transferor
transferors. The request and the response you do not provide [insert name of person or separately stated cash received for
are not required to be in writing. You must responsible for filing] with your correct personal property, such as draperies,
make a reasonable effort to contact all taxpayer identification number, you may be carpeting, or a washer and dryer.
transferors of whom you have knowledge. subject to civil or criminal penalties
However, you may rely on the imposed by law.” The solicitation must Do not reduce gross proceeds by any
unchallenged response of any transferor, contain space for the name, address, and expenses paid by the transferor, such as
and you need not make additional contacts TIN of the transferor, and a place to certify sales commissions, deed preparation,
with other transferors after at least one under penalties of perjury that the TIN advertising, and legal expenses. If a
complete allocation is received (100% of furnished is the correct TIN of the Uniform Settlement Statement (under
gross proceeds, whether or not received in transferor. The certification must read RESPA) is used for a transfer of real estate
a single response). If you receive the similar to: “Under penalties of perjury, I for cash and notes only, gross proceeds
allocation, report gross proceeds on each certify that the number shown on this generally will be the contract sales price
Form 1099-S accordingly. statement is my correct taxpayer shown on that statement. If other property
identification number.” If you use a or services were exchanged, see Box 4
You are not required to, but you may, below.
report gross proceeds in accordance with Uniform Settlement Statement (under
an allocation received after the closing RESPA), you may provide a copy of such Contingent payment transaction.—A
date but before the due date of Form statement, appropriately modified to solicit contingent payment transaction is one in
1099-S (without extensions). However, you the TIN, to the transferor. Keep the Form which the receipt, by or on behalf of the
cannot report gross proceeds in W-9 or substitute form in your records for transferor, is subject to a contingency. The
accordance with an allocation received on 4 years. maximum determinable proceeds means
or after the due date of Form 1099-S Separate Charge Prohibited.—The law the greatest amount of gross proceeds
(without extensions). prohibits any person required to file Form possible if all the contingencies are
1099-S from separately charging any satisfied. If the maximum amount of gross
If no gross proceeds are allocated to a proceeds cannot be determined with
transferor because no allocation or an customer a fee for complying with the
requirements to file Form 1099-S. certainty, the maximum determinable
incomplete allocation is received, you must proceeds are the greatest amount that can
report the total unallocated gross proceeds Statements to Transferors.—For be determined with certainty.
on the Form 1099-S made for that information about the requirement to
transferor. If you do not receive any furnish a statement to the transferor, see Box 3.—Enter the address of the property,
allocation or you receive conflicting part H under General Instructions earlier. including the city, state, and ZIP code, and
allocations, report on each transferor’s if the address does not sufficiently identify
Filer’s Name and Address Box.—Enter the property, also enter a legal description,
Form 1099-S the total unallocated gross the name and address of the person who
proceeds. such as section, lot, and block. For timber
is filing Form 1099-S. This information royalties, enter “Timber.”
Husband and wife.—If the transferors must be the same as the filer information
were husband and wife, at the time of reported on Form 1096. Box 4.—If the transferor received or will
closing, who held the property as joint receive property (other than cash and
Transferor’s Name and Address Box.— consideration treated as cash in computing
tenants, tenants by the entirety, tenants in Enter the name and address of the seller
common, or as community property, treat gross proceeds) or services as part of the
or other transferor of the real estate. If a consideration for the property, enter an “X”
them as a single transferor. Only one Form husband and wife are joint sellers, it is only
1099-S showing either of them as the in the checkbox in box 4.
necessary to enter one name and the TIN
transferor is required. You need not for that person on the form. Box 5.—For a real estate transaction
request an allocation of gross proceeds if involving a residence, enter real estate tax
husband and wife are the only transferors. Box 1.—Enter the closing date. If a paid in advance that is allocable to the
But if you receive an uncontested Uniform Settlement Statement (under purchaser. You do not have to report an
allocation of gross proceeds from them, file RESPA) is used, the closing date is the amount as allocable to the purchaser for
Form 1099-S for each spouse according to date shown as the settlement date on real estate taxes paid in arrears. You may
the allocation. If there are other transferors, such statement. If a Uniform Settlement use the appropriate information included
you must make a reasonable effort to Statement is not used, the closing date is on the HUD-1, or comparable form,
contact either the husband or wife to the earlier of the date title transfers or the provided at closing. For example, a
request an allocation. date the economic burdens and benefits of residence is sold in a county where the
ownership shift to the transferee. Please real estate tax is paid annually in advance.
Partnerships.—If the property is use the following format to indicate the
transferred by a partnership, file only one The seller paid real estate taxes of $1,200
date: MMDDYY. For example, for January for the year in which the sale took place.
Form 1099-S for the partnership, not 7, 1995, enter 010795.
separate Forms 1099-S for each partner. The sale occurred at the end of the ninth
Box 2.—Enter the gross proceeds from month of the real estate tax year.
Multiple Assets Sold.—If real estate is the sale or exchange of real estate. Gross Therefore, $300 of the tax paid in advance
sold or exchanged and other assets are proceeds means any cash received or to is allocated to the buyer, by reference to
sold or exchanged in the same transaction, be received for the real property by or on the amount of real estate tax shown on the
report the total gross proceeds from the behalf of the transferor, including the HUD-1 as paid by the seller in advance,
entire transaction on Form 1099-S. stated principal amount of a note payable and is reported in box 5.
Taxpayer Identification Numbers to or for the benefit of the transferor and Caution: The information about reporting
(TINs).—You must request the transferor’s including a note or mortgage paid off at real estate taxes in box 5 is based on
TIN no later than the time of closing. The settlement. If the transferee assumes a Notice 93-4, 1993-1 C.B. 295. If the
TIN request need not be made in a liability of the transferor or takes the reporting requirement is expanded, the IRS
will announce the new requirements in the need not file Form 5498 nor furnish the If you have no knowledge of the death of
Internal Revenue Bulletin. annual statement to reflect that the fair an IRA owner until after you are required to
market value on December 31 was zero. file Form 5498 (May 31), you are not
Distributions.—Report distributions from required to file a corrected Form 5498 nor
Form 5498 IRAs and SEPs on Form 1099-R. For a furnish a corrected annual statement.
distribution of contributions plus earnings, However, you must still provide the
File Form 5498, Individual Retirement report the distribution on Form 1099-R date-of-death valuation in a timely manner
Arrangement Information, with the IRS on using the applicable code. to the executor or administrator upon
or before May 31, 1996, for each person request.
Inherited IRAs.—In the year an IRA owner
for whom you maintained an individual dies, you, as an IRA trustee or issuer, For more information about the reporting
retirement arrangement (IRA) or simplified generally must file a Form 5498 and furnish requirements for inherited IRAs, see Rev.
employee pension (SEP) during 1995. For an annual statement for the decedent and Proc. 89-52, 1989-2 C.B. 632.
all SEPs, complete only box 4 for the value a Form 5498 and an annual statement for Desert Storm Contributions.—For
of the account; do not report employer each nonspouse beneficiary. An IRA holder information about reporting contributions
SEP contributions in box 1, including those must be able to identify the source of each for a prior year made by a qualifying
made under section 408(k)(6), relating to a IRA he or she holds for purposes of Desert Storm/Shield individual, see Notice
salary reduction SEP (SARSEP), on Form figuring the taxation of a distribution from 91-17, 1991-1 C.B. 319, and the 1994
5498. For an IRA, complete all applicable an IRA. Thus, the decedent’s name must Form 5498 instructions.
boxes. If no IRA contributions were made be shown on the beneficiary’s Form 5498
for 1995, complete only box 4. Box 1.—Enter regular contributions to an
and annual statement. For example, you IRA made in 1995 and through April 15,
For contributions made between January may enter “Brian Young as beneficiary of 1996, designated for 1995. Also include
1 and April 15, 1996, trustees and issuers Joan Smith” or something similar that employee contributions to an IRA under a
should obtain the participant’s designation signifies that the IRA was once owned by SEP plan but only those that would be
of the year for which the contributions are Joan Smith. You may abbreviate the word subject to the deduction limit under
made. “beneficiary” as, for example, “benef.” section 219. Report gross contributions,
Direct Rollovers and Transfers.—You For a spouse beneficiary, unless the including the amount allocable to the cost
must report the receipt of a direct rollover spouse makes the IRA his or her own by of life insurance (see Box 3) and including
from a qualified plan or tax-sheltered making contributions to the account, any excess contributions, even if the
annuity. Report a direct rollover in box 2. including a rollover contribution, or by not excess contributions were withdrawn. If an
For information on direct rollovers of taking distributions required by section excess contribution is treated as a
eligible rollover distributions, see Form 401(a)(9)(B), treat the spouse as a contribution in a subsequent year, do not
1099-R earlier. nonspouse beneficiary for reporting report it on Form 5498 for the subsequent
However, do not report a direct purposes. If the spouse makes the IRA his year. It has already been reported as a
trustee-to-trustee transfer from one IRA to or her own, report on Form 5498 and the contribution on Form 5498 for the year it
another. For reporting purposes, annual statement without the beneficiary was actually contributed.
contributions and rollovers do not include designation. Box 2.—Enter rollover contributions,
these transfers. Fair market value.—On the decedent’s including direct rollovers from a qualified
Statements to Participants.—Trustees or Form 5498 and annual statement, you plan or tax-sheltered annuity, made to an
issuers of IRAs or SEPs must provide must enter the fair market value of the IRA IRA received by you during 1995.
participants with a statement of the on the date of death in box 4. Or you may Box 3.—For endowment contracts only,
December 31, 1995, value of the choose the alternate reporting method and enter the amount included in box 1
participant’s account by January 31, 1996, report the fair market value as of the end allocable to the cost of life insurance.
in any written format. Trustees or issuers of the year in which the decedent died.
This alternate value will usually be zero Box 4.—Enter the fair market value of the
of IRAs must provide participants with IRA or SEP account on December 31. For
contribution information by May 31. You because you will be reporting the
end-of-year valuation on the beneficiary’s inherited IRAs, see Inherited IRAs earlier.
are not required to provide information to
the IRS or to participants as to whether a Form 5498 and annual statement, and the
contribution is deductible or nondeductible. same figure should not be shown on both Form W-2G
In addition, the participant is not required the beneficiary’s and decedent’s forms. If
to tell you whether a contribution is you choose to report using the alternate
deductible or nondeductible. method, you must inform the executor or The requirements for filing Form W-2G,
administrator of the decedent’s estate of Certain Gambling Winnings, and for
If the trustee or issuer furnished a withholding on certain gambling winnings
his or her right to request a date-of-death
statement of the fair market value of the depend on the type of gambling, the
valuation. If you use the language for box
IRA to the participant by January 31, 1996, amount of the gambling winnings, and
4 on the back of Copy B of the official
and no contributions were made to the IRA generally the ratio of the winnings to the
1995 Form 5498, or you use the official
by the participant for 1995, the trustee or wager.
Copy B, you will have met this notice
issuer need not furnish another statement
requirement. The types of gambling are grouped as
(or Form 5498) to the participant to report
zero contributions. However, Form 5498 On the beneficiary’s Form 5498 and follows:
must be filed with the IRS by May 31, annual statement, the fair market value of 1—Horse Racing, Dog Racing, Jai Alai,
1996, to report the December 31, 1995, that beneficiary’s share of the IRA as of and Other Wagering Transactions Not
fair market value of the IRA. This rule also the end of the year must be shown in box Discussed Later
applies to beneficiary accounts under the 4. Every year thereafter that the IRA exists, 2—Sweepstakes, Wagering Pools, and
inherited IRA rules below. you must file Form 5498 and furnish an Lotteries (Including State-Conducted
annual statement for each beneficiary who Lotteries)
Note: If the trustee or issuer does not
has not received a total distribution of his
furnish another statement to the participant 3—Keno, Bingo, and Slot Machines
or her share of the IRA showing the fair
because no contributions were made for
market value at the end of the year and Reportable Gambling Winnings.—If you
the year, the statement of the fair market
identifying the IRA as described above. pay “reportable gambling winnings,” you
value of the account must contain a legend
However, if a beneficiary takes a total must file Form W-2G with the IRS and
designating which information is being
distribution of his or her share of the IRA in provide a statement to the winner.
furnished to the Internal Revenue Service.
the year of death, you need not file a Form Generally, gambling winnings are
Total Distribution, No Contributions.— reportable if the amount paid reduced, at
5498 nor furnish an annual statement for
Generally, if a total distribution was made the option of the payer, by the wager is
from an IRA during the year and no (1) $600 or more and (2) at least 300 times
contributions were made for that year, you the amount of the wager. However, these
two requirements do not apply to winnings Certification, to request the TIN of the Form W-2G is being prepared are
from keno, bingo, and slot machines. If the recipient. aggregated for purposes of withholding to
winnings from a keno game (reduced by Foreign Persons.—Payments of certain determine if the total amount of proceeds
the wager) are $1,500 or more, they are gambling winnings to a nonresident alien from identical wagers is more than $5,000.
reportable gambling winnings. If the individual or a foreign corporation are not If the person presenting the ticket for
winnings (not reduced by the wager) from subject to reporting or withholding on Form payment is the sole owner of the ticket,
a bingo game or slot machine play are W-2G or Form 5754, Statement by Form W-2G should be completed showing
$1,200 or more, they are reportable Person(s) Receiving Gambling Winnings, the name, address, and identification
gambling winnings. since such payments are subject to number of the winner. If regular gambling
Regular Gambling Withholding.—A payer withholding under sections 1441(a) and withholding is required, the winner must
of certain gambling winnings (not including 1442(a) and are reportable on Forms 1042 sign the Form W-2G, under penalties of
winnings from keno, bingo, and slot and 1042-S. perjury, stating that he or she is the sole
machines) is required to withhold 28% owner and that the information listed on
State Tax Information.—If state income the form is correct. In this case, Form 5754
from such winnings and report this amount tax withholding is required on gambling
as Federal income tax withheld in box 2 on is not used.
winnings in your state, you may want to
Form W-2G. This is referred to as regular complete boxes 13 and 14 on Form W-2G. Box 1.—Enter payments of $600 or more if
gambling withholding. It applies if gambling Copy 1 of the form may be used to the payment is at least 300 times the
winnings are more than $5,000 and are provide information to the state, and Copy amount of the wager.
from (1) a sweepstakes, wagering pool, or 2 may be used as the winner’s copy for Box 2.—Enter the amount of Federal
nonstate-conducted lottery, or (2) other use in filing a state income tax return. The income tax withheld, whether regular
wagering transactions when the winnings state identification number is assigned by withholding or backup withholding.
are at least 300 times the amount the individual state.
wagered. Regular gambling withholding Box 3.—Enter the type of wager if other
applies to the total amount of gross Form 5754.—If the person receiving the than a regular race bet, for example, Daily
proceeds (the amount of winnings less the winnings is not the actual winner, or is a Double or Big Triple.
amount wagered) not merely to the amount member of a group of winners, see Form Box 4.—Enter the date of the winning
in excess of $5,000. Report regular 5754 later. event. This is not the date the money was
gambling withholding on Form 945, Annual Statements to Winners.—For information paid if paid after the date of the race (or
Return of Withheld Federal Income Tax. about the requirement to furnish a game).
Noncash payments.—Noncash statement to the winner, see part H under Box 5.—Not applicable.
payments, such as automobiles, must be General Instructions earlier.
Box 6.—Enter the race (or game)
taken into account at their fair market 1—Horse Racing, Dog Racing, Jai applicable to the winning ticket.
values for purposes of reporting and
Alai, and Other Wagering Box 7.—Enter the amount of additional
withholding. If the fair market value
winnings from identical wagers.
exceeds $5,000, after deducting the price Transactions Not Discussed Later
of the wager, it is subject to regular Box 8 or 10.—Enter the cashier and/or
gambling withholding. In such a case, the File Form W-2G for every person to whom window number making the winning
tax that must be withheld is computed you pay $600 or more in gambling payment.
under either of two methods as follows: winnings if such winnings are at least 300
Boxes 11 and 12.—Enter the identification
(1) if payment of the withholding tax is times the amount of the wager. You must
numbers of the person receiving the
made by the winner to the payer of withhold Federal income tax, at the rate of
winnings, 28% of the noncash payment 28%, from the amount of winnings less the
amount wagered if such winnings less the Box 13.—(optional) Enter the abbreviated
less the amount of the wager is the name of the state and your state
withholding; (2) if the payer of winnings wager exceed $5,000 and if the winnings
are at least 300 times the amount of the identification number.
also pays the withholding tax on behalf of
the winner, 38.88% of the noncash wager. If the winner of reportable gambling Box 14.—(optional) Enter the amount of
payment (less the wager) is the winnings does not provide a TIN, you must state income tax withheld.
withholding. If the method under (2) is backup withhold at the rate of 31% on any
used, the sum of the noncash payment such winnings that are not subject to 2—Sweepstakes, Wagering Pools,
and withholding tax is entered in box 1 of regular gambling withholding under the and Lotteries (Including
Form W-2G. See Notice 93-7, 1993-1 C.B. preceding sentence. That is, if the
winnings are at least $600 but not more State-Conducted Lotteries)
than $5,000 and are at least 300 times the File Form W-2G for each person to whom
Backup Withholding.—If a winner fails to wager, backup withholding applies to the you pay $600 or more in gambling
furnish a payer of reportable gambling amount of the winnings reduced, at the winnings from a sweepstakes, wagering
winnings with a correct taxpayer option of the payer, by the amount pool, or lottery (including a
identification number (TIN), the payer is wagered. state-conducted lottery) if such winnings
required to withhold 31% of the proceeds are at least 300 times the amount of the
and to report this amount as Federal In the case of multiple wagers sold on
one ticket, such as the $12 box bet on a wager. You must withhold Federal income
income tax withheld in box 2 on Form tax, at the rate of 28%, from the amount of
W-2G unless the winnings are already Big Triple or Trifecta, the wager will be
considered to be six $2 bets and not one winnings less the amount wagered if such
subject to regular gambling withholding as winnings less the wager exceed $5,000. If
explained above. This is referred to as $12 bet for purposes of computing the
amount to be reported or withheld. the recipient of such reportable gambling
backup withholding. Backup withholding winnings does not provide a TIN, you must
applies to the amount of the winnings Winnings on a $12 box bet must be
reported if they are $600 or more, and impose backup withholding at the rate of
reduced, at the option of the payer, by the 31% on any such winnings that are not
amount wagered and not merely to the Federal income tax must be withheld if the
proceeds amount to more than $5,000 or, subject to regular gambling withholding
amounts of such reportable payments in under the terms of the preceding sentence.
excess of $600, $1,200, or $1,500 (the in the event the proceeds do not exceed
$5,000, if the recipient fails to provide a That is, if the winnings are at least $600
thresholds for information reporting). See but not more than $5,000 and are at least
the instructions for each type of gambling TIN.
300 times the wager, backup withholding
for detailed rules for backup withholding. Identical wagers (for example, two $2
applies to the amount of the winnings
Report backup withholding on Form 945, bets on a particular horse to win the same
reduced, at the option of the payer, by the
Annual Return of Withheld Federal Income race) are aggregated for purposes of the
amount wagered. These requirements
Tax. reporting and withholding requirements.
apply to church raffles, charity drawings,
A payer may use Form W-9, Request for Also, winnings from identical wagers that
Taxpayer Identification Number and are not part of the payment for which the
Installment payments of $5,000 or less 3—Keno, Bingo, and Slot
are subject to regular 28% gambling Form 5754
withholding if the aggregate proceeds from
such wager will exceed $5,000. File Form W-2G for every person to whom
you pay $1,200 or more in gambling Form 5754, Statement by Person(s)
If payments are to be made for the life of Receiving Gambling Winnings, is used
a person (or for the lives of more than one winnings from bingo or slot machines, or
$1,500 or more from keno after the price only in preparing Form W-2G when the
person), and it is actuarially determined person receiving gambling winnings
that the aggregate proceeds from such of the wager for the winning keno game is
deducted. If the winnings are of a noncash subject to reporting or withholding is not
wager are expected to exceed $5,000, the actual winner or is a member of a
such payments are subject to regular 28% nature, the fair market value of the item
won is to be considered the amount of the group of two or more winners on the same
gambling withholding. winning ticket. The payer is required to file
winnings. Total all winnings from each
The price of the wager must be bingo or keno game. Winnings and losses Forms W-2G based on Form 5754.
deducted from the total winnings to from other wagering transactions are not to The person receiving the winnings must
determine whether withholding is required be taken into account in arriving at the furnish all the information required by Form
and at the option of the payer to determine $1,200 or $1,500 figure. If the recipient of 5754. However, a recipient of winnings
whether reporting is required. The reportable gambling winnings from bingo, from a state-conducted lottery need not
deduction for the cost of the wager should keno, or slot machines does not provide a provide identification other than his or her
be made at the time of the first payment. TIN, you must backup withhold at the rate taxpayer identification number. Part I lists
A payment of winnings is considered of 31% on any such winnings. Backup the identification of the person to whom
made when it is paid, either actually or withholding applies to the amount of the the winnings are paid, and Part II lists the
constructively, to the winner. Winnings are winnings reduced, at the option of the actual winners, their respective shares of
constructively paid when they are credited payer, by the amount wagered. Regular the winnings, and any additional winnings
to, or set apart for, that person without any gambling withholding does not apply to from identical wagers.
substantial limitation or restriction on the winnings from keno, bingo, or slot In Part II, the person receiving the
time, manner, or condition of payment. machines. winnings must provide the name, address,
When a third party makes the payments, Box 1.—Enter payments of $1,200 or more identification number, respective share of
as in the case of an insurance company from bingo or slot machines or payments the winnings, and additional winnings from
handling the winnings as an annuity, that of $1,500 or more from keno. identical wagers for each of the winners. In
third party must deduct and withhold. Box 2.—Enter the amount of any backup addition, if regular gambling withholding is
Box 1.—Enter payments of $600 or more. withholding. required, the form must be signed, under
Box 2.—Enter the amount of Federal penalties of perjury, and dated by the
Box 3.—Enter the type of wager, such as person receiving the winnings. The form
income tax withheld, whether regular keno, bingo, and slot machines, and the
gambling withholding or backup must be returned to the payer for
amount of the wager. preparation of Form W-2G for each of the
withholding. Box 4.—Enter the date of the winning persons listed as winners. Forms W-2G
Box 3.—Enter the type of wager (such as transaction. may be issued immediately or by January
raffle or 50-50 drawing) or the name of the Box 5.—Enter the ticket number, card 31 following the year of the payment. Do
lottery (such as Instant, Big 50, or Baker’s number (and color, if applicable), machine not send Form 5754 to the IRS. Keep it
Dozen) and the price of the wager (50¢, serial number, or any other information that for your records.
$1, etc.). will help identify the winning transaction. Withholding and Forms W-2G for
Box 4.—Enter the date of the winning Boxes 6 and 7.—Not applicable. Multiple Winners.—If more than one
transaction, such as the date of the person shares in the winnings from a
drawing of the winning number. This might Box 8.—Enter the initials of the person
single wager, the total amount of the
not be the date the winnings are paid. paying the winnings.
winnings (less the amount wagered) will
Box 5.—For a state lottery, enter the ticket Box 10.—Enter the location of the person determine the amount of the proceeds for
number or other identifying number. paying the winnings, if applicable. purposes of reporting and withholding. Do
Boxes 6 through 8 and 10.— Not Boxes 11 and 12.—Enter the identification not allocate winnings to each winner
applicable. numbers of the person receiving the before determining whether the withholding
winnings. or reporting thresholds were reached.
Boxes 11 and 12.—For other than state
lotteries, enter the identification numbers Box 13.—(optional) Enter the abbreviated For example, E purchases a
of the person receiving the winnings. name of the state and your state sweepstakes ticket for $1 on behalf of
identification number. himself and S, who contributes an equal
Box 13.—(optional) Enter the abbreviated amount of the ticket price and who will
name of the state and your state Box 14.—(optional) Enter the amount of
state income tax withheld. share equally in any winnings. The ticket
identification number. wins $5,002. Since the winnings ($5,002 -
Box 14.—(optional) Enter the amount of $1 = $5,001) are more than $5,000, you
state income tax withheld. must withhold 28% of $5,001. You must
prepare Form W-2G for E and for S, using
the information furnished to you on Form
Guide to Information Returns (If any date shown falls on a Saturday, Sunday, or legal holiday, the due date is the next business day.)
Form Title What To Report Amounts To Report To Recipient
To IRS (unless indicated
1042-S Foreign Person’s U.S. Payments subject to withholding under Chapter
Source Income Subject 3 of the Code, including interest, dividends,
to Withholding royalties, pensions and annuities, gambling All amounts March 15 March 15
winnings, and compensation for personal
1098 Mortgage Interest Mortgage interest (including points) you received (To
Statement in the course of your trade or business from Payer/Borrower)
$600 or more February 28
individuals and reimbursements of overpaid January 31
1099-A Acquisition or Information about the acquisition or
Abandonment of abandonment of property that is security for a All amounts February 28 (To Borrower)
Secured Property debt for which you are the lender. January 31
1099-B Proceeds From Broker Sales or redemptions of securities, futures
and Barter Exchange transactions, commodities, and barter exchange All amounts February 28 January 31
1099-C Cancellation of Debt Cancellation of a debt owed to a financial
institution, credit union, RTC, FDIC, NCUA, or $600 or more February 28 January 31
Federal Government agency.
1099-DIV Dividends and Distributions, such as dividends, capital gain
$10 or more, except
Distributions distributions, or nontaxable distributions, that
$600 or more for February 28 January 31
were paid on stock, and distributions in
1099-G Certain Government Unemployment compensation, state and local $10 or more for
Payments income tax refunds, agricultural payments, and unemployment and
February 28 January 31
taxable grants. tax refunds; $600 or
more for all others
1099-INT Interest Income Interest income not including interest on an IRA. $10 or more ($600 or
February 28 January 31
more in some cases)
1099-MISC Miscellaneous Income Rent or royalty payments; prizes and awards that $600 or more, except
are not for services, such as winnings on TV or $10 or more for
radio shows. royalties
(Also, use this form to Payments to crew members by owners or
report the occurrence operators of fishing boats. Report payments of All payments
of direct sales of proceeds from sale of catch.
$5,000 or more of Payments to a physician, physicians’
consumer goods for corporation, or other supplier of health and
resale.) medical services. Issued mainly by medical $600 or more
assistance programs or health and accident
insurance plans. February 28 January 31
Payments for services performed for a trade or
business by people not treated as its employees.
Examples: fees to subcontractors or directors,
expenses incurred for use of an entertainment $600 or more
facility treated as compensation to a
nonemployee, and golden parachute payments.
Substitute dividend and tax-exempt interest
$10 or more
payments reportable by brokers.
Crop insurance proceeds. $600 or more
1099-OID Original Issue Discount Original issue discount. $10 or more February 28 January 31
1099-PATR Taxable Distributions
Received From Distributions from cooperatives to their patrons. $10 or more February 28 January 31
1099-R Distributions From
Retirement or Distributions from retirement or profit-sharing All amounts February 28 January 31
Profit-Sharing Plans, plans, IRAs, SEPs, or insurance contracts.
1099-S Proceeds From Real Gross proceeds from the sale or exchange of Generally, $600 or
February 28 January 31
Estate Transactions real estate. more
4789 Currency Transaction Each deposit, withdrawal, exchange of currency, Within 15
Report or other payment or transfer by, through, or to days after
financial institutions (other than casinos) that Over $10,000 the date of Not required
involves a transaction in currency of more than the
Guide to Information Returns (Continued)
Form Title What To Report Amounts To Report To Recipient
To IRS (unless indicated
5471 Information Return of U.S. persons who are officers, directors, or
U.S. Persons With shareholders in certain foreign corporations Due date
Respect To Certain report information required by sections 6035, See form instructions of income None
Foreign Corporations 6038, and 6046, and to compute income under tax return
5472 Information Return of a Transactions between a 25% foreign-owned
25% Foreign-Owned domestic corporation or a foreign corporation
U.S. Corporation or a engaged in a trade or business in the United
See form instructions of income None
Foreign Corporation States and a related party as required by
Engaged in a U.S. sections 6038A and 6038C.
Trade or Business
5498 Individual Retirement (To Participant)
Arrangement Contributions (including rollover contributions) to (for value of
Information an individual retirement arrangement (IRA), and account)
All amounts May 31
the value of an IRA or simplified employee January 31
pension (SEP) account. (for contributions)
8027 Employer’s Annual Allocated tips
Information Return of Receipts from food or beverage operations, tips See separate Last day of are shown on
Tip Income and reported by employees, and allocated tips. instructions February Form W-2,
Allocated Tips due January 31
8300 Report of Cash Payments in cash (including certain monetary
Payments Over instruments) or foreign currency received in one
$10,000 Received in a transaction, or two or more related transactions,
Trade or Business in the course of a trade or business. Does not
apply to banks and financial institutions filing (To Payer)
Over $10,000 the date of
Form 4789, Currency Transaction Report, and January 31
casinos that are required to report such
transactions on Form 8362, Currency
Transaction Report by Casinos, or, generally, to
transactions outside the United States.
8308 Report of a Sale or Sales or exchanges of a partnership interest (To Transferor
Exchange of Certain involving unrealized receivables or substantially and
(Transaction only) attach to
Partnership Interests appreciated inventory items. Transferees)
W-2G Certain Gambling Gambling winnings from horse racing, dog Generally, $600 or
Winnings racing, jai alai, lotteries, keno, bingo, slot more; $1,200 or
machines, sweepstakes, and wagering pools. more from bingo or
February 28 January 31
$1,500 or more from
926 Return by a U.S. Transfers of property to a foreign corporation, Day of
Transferor of Property estate, trust, or partnership; also used to pay transfer; for
to a Foreign excise tax under section 1491 and to report section
See form instructions None
Corporation, Foreign information under section 6038B. 6038B,
Estate or Trust, or attach to
Foreign Partnership tax return
W-2 Wage and Tax Wages, tips, other compensation, withheld To SSA To Recipient
Statement income, social security, and Medicare taxes, and
advance earned income credit (EIC) payments.
Include bonuses, vacation allowances, severance Last day of
instructions January 31
pay, moving expense payments, some kinds of February
travel allowances, and third-party payments of
TD F Report of Foreign Bank Financial interest in or signature or other To Treasury To Recipient
90-22.1 and Financial Accounts authority over a foreign bank account, securities Over $10,000 Dept.
account, or other financial account.
June 30 None
Types of Payments
Below is an alphabetical list of some payments and the forms to file to report them. The list was developed to help you determine which
form to file. However, it is not a complete list of all payments, and the absence of a payment from the list does not indicate that the
payment is not reportable.
Type of Payment Report on Form Type of Payment Report on Form Type of Payment Report on Form
Abandonment 1099-A Discharge of indebtedness 1099-C Mortgage interest 1098
Advance earned income credit W-2 Dividends 1099-DIV Moving expense W-2
Agriculture payments 1099-G Education expense reimbursement: Nonemployee compensation 1099-MISC
Allocated tips W-2 Employee W-2 Nonqualified plan distribution W-2
Annuities 1099-R Nonemployee 1099-MISC Beneficiaries 1099-R
Auto reimbursements: Employee business expense Original issue discount (OID) 1099-OID
Employee W-2 reimbursement W-2 Patronage dividends 1099-PATR
Nonemployee 1099-MISC Employee compensation W-2 Pension 1099-R
Awards: Excess deferrals, excess Points 1098
contributions, distributions of 1099-R
Employee W-2 Prizes:
Nonemployee 1099-MISC Employee W-2
Barter exchange income 1099-B Nonemployee 1099-MISC
Bonuses: Profit-sharing plan 1099-R
Fishing boat crew members
Employee W-2 proceeds 1099-MISC PS 58 costs 1099-R
Nonemployee 1099-MISC Foreclosures 1099-A Qualified plan distributions 1099-R
Broker transactions 1099-B Foreign persons’ income 1042-S Real estate transactions 1099-S
Cancellation of debt 1099-C 401(k) contributions W-2 Refunds, state and local tax 1099-G
Car expense: 404(k) dividend 1099-DIV Rents 1099-MISC
Employee W-2 Gambling winnings W-2G Retirement 1099-R
Nonemployee 1099-MISC Golden parachute: Royalties 1099-MISC
Charitable gift annuities 1099-R Employee W-2 Timber, pay-as-cut contract 1099-S
Christmas bonuses: Nonemployee 1099-MISC Sales:
Employee W-2 Grants, taxable 1099-G Real estate 1099-S
Nonemployee 1099-MISC Health care services 1099-MISC Securities 1099-B
Commissions: Income tax refunds, state Section 1035 exchange 1099-R
Employee W-2 and local 1099-G SEP contributions W-2
Nonemployee 1099-MISC Indian gaming profits SEP distributions 1099-R
Commodities transactions 1099-B paid to tribal members 1099-MISC Severance pay W-2
Compensation: Interest income 1099-INT Sick pay W-2
Employee W-2 Interest, mortgage 1098 Substitute payments in lieu of
Nonemployee 1099-MISC IRA contributions 5498 dividends or tax-exempt
IRA/SEP distributions 1099-R interest 1099-MISC
Crop insurance proceeds 1099-MISC
Life insurance contract Supplemental unemployment W-2
distributions 1099-R Tips W-2
Debt cancellation 1099-C
Liquidation, distributions in 1099-DIV Unemployment benefits 1099-G
Dependent care payments W-2
Medical services 1099-MISC Vacation allowance:
Direct rollovers 1099-R, 5498
Mileage: Employee W-2
Direct sales of consumer
products for resale 1099-MISC Employee W-2 Nonemployee 1099-MISC
Directors’ fees 1099-MISC Nonemployee 1099-MISC Wages W-2
Military retirement 1099-R
Index Form 1099-C 1, 13 Parking, value of 18
Abandonments 11 Form 1099-DIV 14 Patronage distributions 21
Account number box 4, 7 Form 1099-G 15 Payee statements 1, 6
Agricultural commodities, sales of 12 Form 1099-INT 15 Penalties 2
Agriculture payments 15 Form 1099-MISC 17 Pension distributions 22–26
Annuity distributions 22–26 Form 1099-OID 20 Points 1, 10, 11
Form 1099-PATR 21 Constructions loans 10
Backup withholding 2, 13, 15, 16, 18, Form 1099-R 1, 22 Precious metals, sales of 12
21, 30, 31 Form 1099-S 26 Prizes and awards 18
Barter exchange transactions 13 Form 5498 29 Profit-sharing distributions 22
Bingo winnings 30, 31 Form 5754 31 PS 58 costs 22, 23, 24, 25, 26
Broker transactions 12, 13, 20 Form W-2G 29
Bulletin board, IRP-BBS 1, 3 404(k) dividend 14 Qualified plan distributions 22–26
Qualified settlement funds 4
Cancellation of debt 1, 13 Gambling winnings 29–31
CDOs reporting requirements 16, 21 Golden parachute payments 20 Real estate tax 28
Changes this year 1 Government payments 15 Real estate transactions 26
Charitable gift annuities 22, 24, 25 Grants, taxable 15 Refunds:
Collection agents 9 Gross proceeds 13, 28 Overpaid interest 9, 11
Commissions 18, 19 Guide to information returns, chart 32 State and local tax 15
Commodities 12 REMICs reporting requirements 16, 21
Construction project, escrow agent 18 Health care services, payments 19 Rents 18
Consumer products of $5,000, Help 1 Retirement payments 22–26
indicator for 20 Horse racing winnings 30 Rollovers 22, 24, 26, 29
Cooperatives 9, 11, 21 Royalties 18
Income tax refunds, state and local 15
Corporations, payments to 8 Timber 27, 28
Independent contractor payments 18
Corrected returns, how to file 7
Indian gaming profits, reporting 18 Sales of real estate 26
Crop insurance proceeds 20
Informants, fees 17 Sales of stock 12
Damages 18 Inherited IRAs 29 Scholarships 17
Death benefit payments 22, 24 Insurance contracts 22, 25 Second TIN notice indicator 13, 14, 16,
Deceased employee’s wages 17 Interest income 15 18, 20, 21
Debt cancellation 1, 13 Interest, mortgage 8 Section 530 employee 18
Designation agreement 9, 27 IRA contributions 29 Section 1035 exchange 22, 23, 24
Direct rollovers 22, 24, 26, 29 IRA/SEP distributions 22, 24, 25, 26 Slot machine winnings 30, 31
Direct sales of consumer products State and local tax refunds 15
for resale 20 Jai alai winnings 30
Statement mailing requirements 6
Directors’ fees 18, 19 Keeping copies 5 Statements to recipients 1, 6
Discharge of indebtedness 1, 13 Keno winnings 30, 31 Substitute forms 1, 6
Dividends 14 Substitute payments in lieu of
Dog racing winnings 30 Life insurance contract distributions 22, 23
dividends or tax-exempt
Due dates 5, 7, 29 Liquidation, distributions in 15 interest 20
Lottery ticket agents, commissions 18 Successor/predecessor
Employee contributions 25, 26 Lottery winnings 30 corporation 15
Excess annual additions 23, 26 Sweepstakes 30
Excess deferrals, excess Magnetic media/electronic reporting 3
contributions, corrective Mailing forms 5 Taxpayer identification
distributions of 23, 26 Medical services, payments 19 numbers 2, 5, 6, 14, 28
Exempt volume transferor 27 Mergers 4 Transit passes 18
Extension to file 5 Military retirement 22 Types of payments, alphabetical list 34
Extention to furnish statements 7 Miscellaneous income 17
Unemployment compensation 15
Missing plan participants 23
Fair market value of IRA and SEP 29 Unrealized appreciation 25
Mortgage interest 8
Fees 17, 18, 19
Reimbursement of overpaid 9, 11 Void returns 8
Fishing boat proceeds 19
Foreclosures 11, 12 Nominee/middleman 4 When to file 5
Foreign: Nonemployee compensation 19 When to furnish statements 7, 29
Interest recipient 9 Nonqualified plan distribution 22 Where to file 1, 5
Persons, payments to 5, 30 Who must file, general 4
Ordering forms 1 Withholding:
Original issue discount (OID) 20
Form 945 1, 2, 24, 30 Backup 2, 13, 15, 16, 18, 21, 30, 31
Other income 18
Form 1096 1, 5 Gambling 30, 31
Form 1098 1, 8 Paper document reporting 4 Pensions and annuities 24
Form 1099-A 1, 11
Form 1099-B 12
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