What year is a RE transaction reported in?

  • Thread starter Lagrangian Mechanic
  • Start date

L

Lagrangian Mechanic

Several years ago I inherited some investment property (raw land)
in another state and have been trying to sell it.

Finally got a buyer, documents were FedExed back and forth and the
final documents I had to send in to allow the sale to close were
received by the closing agent in the other state on December 26, 2012
and the transaction was set to close on December 27, 2012.

Since I would be out of town, I asked the closing agent not to mail
the check for the proceeds until January 4, 2013 so the check would
arrive after I returned from my trip. The check (and only the check --
no other documents came with it) was received and cashed shortly
thereafter.

As of today I have still not received a 1099-S from the closing
agent or the seller. I'm trying to find out what's going on with that.

My question: If the agent doesn't issue a 1099-S, what year is the
sale reported in? As far as I know the closing actually did happen
before December 31 (the buyer wanted to purchase it before the end
of the year), but the check wasn't even mailed until January.

Is it constructive receipt and 2012 because the closing (presumably)
happened in 2012 and so the funds were "available"? Is it 2013
because the check wasn't even placed in the mail until 2013?

(If a 1099-S does get sent I'm planning to just follow what year
it's reported for even if that's not the "right" answer because
I don't feel like dealing with it).

Thanks!
 
Ad

Advertisements

P

paulthomascpa

Lagrangian Mechanic said:
Several years ago I inherited some investment property (raw land)
in another state and have been trying to sell it.

Finally got a buyer, documents were FedExed back and forth and the
final documents I had to send in to allow the sale to close were
received by the closing agent in the other state on December 26, 2012
and the transaction was set to close on December 27, 2012.

Since I would be out of town, I asked the closing agent not to mail
the check for the proceeds until January 4, 2013 so the check would
arrive after I returned from my trip. The check (and only the check --
no other documents came with it) was received and cashed shortly
thereafter.

As of today I have still not received a 1099-S from the closing
agent or the seller. I'm trying to find out what's going on with that.

My question: If the agent doesn't issue a 1099-S, what year is the
sale reported in? As far as I know the closing actually did happen
before December 31 (the buyer wanted to purchase it before the end
of the year), but the check wasn't even mailed until January.

Is it constructive receipt and 2012 because the closing (presumably)
happened in 2012 and so the funds were "available"? Is it 2013
because the check wasn't even placed in the mail until 2013?

(If a 1099-S does get sent I'm planning to just follow what year
it's reported for even if that's not the "right" answer because
I don't feel like dealing with it).

Thanks!

Constructive receipt is when you had the right to the funds. That you could
direct the payment to be "held" indicates you had rights to it, and control
over the proceeds. The sale should be, in my opinion, reportable in the
earlier year, if that is when the sale indeed did take place.
 
Ad

Advertisements

S

Stuart A. Bronstein

paulthomascpa said:
Constructive receipt is when you had the right to the funds.
That you could direct the payment to be "held" indicates you had
rights to it, and control over the proceeds. The sale should
be, in my opinion, reportable in the earlier year, if that is
when the sale indeed did take place.
I agree. December 27 was a Thursday. If that is when the check
would have been mailed there was plenty of time for it to have
arrived and been deposited by OP during 2012. So that is when it
should properly be taxed.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Similar Threads


Top