Tree Farmer - July/August 2011 - (Page 24)

Reporting linda tion number is required for 1099-S reporting. Form W-9 or its substitute may be used to request the seller’s tax payer identification number and should be kept for four years. settlement agent or other person responsible for preparing the settlement statement. • If a settlement statement under RESPA is not used, or no settlement agent is listed, the person responsible for closing is the person who prepares the closing statement, including a settlement statement or other written document that identifies the transferor, transferee, and real estate transferred, and that describes how the proceeds are to be disbursed. • If no closing statement is used, or if two or more statements are used, the person responsible for closing is, in the following order: Linda Wang is a national timber tax specialist with the U.S. Department of Agriculture’s Forest Service, based in Washington, D.C. Tax taxing issues By on Timber Sales: Details on Form 1099-S Wang Here we answer some of the questions we have been hearing lately regarding tax reporting. What is Form 1099-S? Form 1099-S (“Proceeds from Real Estate Transactions”) is used to report the sale or exchange of real estate, including standing timber sales (Sec. 1.6045-4 and Sec. 6050N). However, sales of less than $600 are exempt. This form functions similarly to a more common type of Form 1099 — Form 1099-INT, for example, where your bank reports the interest it paid to you during the year to both the IRS and you. It provides payment information that the payment recipients can use it to file their taxes. Who is responsible for filing a Form 1099-S? According to the IRS instructions to Form 1099-S, generally the person responsible for filing Form 1099-S is (in this order): 1. The person responsible for closing the transaction. • If a settlement statement is used, the settlement agent on the statement must file Form 1099-S. The settlement statement is prescribed under the Real Estate Settlement Procedures Act of 1974 (RESPA) and includes any amendments, variations, or substitutions prescribed under RESPA if any such form requires disclosure of the transferor and transferee, the application of the proceeds, and the name of the Is Form 1099-S required for a lump-sum or pay-as-cut timber sales? Form 1099-S is required for both lump-sum (Sec. 1.6045-4) and payas-cut standing timber sales (Sec. 6050N). Is a taxpayer identification number required for preparing Form 1099-S? Yes. By law, the seller’s Social Security number/taxpayer identifica- 24 International Year of Forests, 2011 Tree Farmer JULY/AUGUST 2011

Table of Contents for the Digital Edition of Tree Farmer - July/August 2011

Tree Farmer - July/august 2011
Contents
Cover Story
2011 Western Regional Tree Farmers of the Year
Forestry 101: Planting Small Bare Root Seedlings
Conservations Programs
Ties to the Land
Taxing Issues
Gadgets & Gear
Woodland Security
Wildlife Matters

Tree Farmer - July/August 2011