LandInvestors.com Forums **Ask A Question** Tax Forms (1099S)

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    Eric Held
    Participant
    Post count: 32

    I’ve got a question about the 1099S form looking at the directions for it. I have a tax preparer but just trying to get straight in my head.

    Since I closed several cash purchases myself without a broker, I have to get the sellers TIN and file a 1099S, correct?

    Way I read the instructions, for the one’s I sold, though I don’t have to file it the buyer does, which I’d think is unlikely.

    If anyone’s worked through this I’d like to hear it, otherwise I’ll let the tax guy figure it out in a few weeks.

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  • Luke Smith
    Moderator
    Post count: 1304
    ProAdvanced

    Darn taxes, there are some exceptions in the 1099-S instructions that might apply:
    title
    number2
    de minimis

    I like the volume one.

    Josh George
    Participant
    Post count: 43
    Pro

    @luketsmith
    @eheld
    @admin

    Being pretty new to running any kind of side business, I’m a little unsure on how to handle my taxes for it? What separate tax forms do we need to file with our taxes? Are there different forms for when doing cash sales vs. terms deals? I plan to speak with my tax accountant about this but I thought I’d see what kinds of things people were tracking for their land businesses?

    S. Jack Butala
    Participant
    Post count: 111
    ProAdvancedStaffPrincipal

    @joshgeorge

    Here’s the tax overview:

    If you are brand new, I recommend this (but listen to your accountant in the end):

    For your personal tax return in your first year, file a schedule C if you don’t have an LLC or a corporation entity set up. That will show revenue and expenses for your business that is not yet incorporated. If you have a business entity set up, you can file a separate return. There’s S corps and C corps and they get filed differently so ask your guy/gal accountant. All of ours are set up as S corps. Your situation is unique.

    Ask your accountant if they believe this is ordinary income or income from real estate transactions. I have a strong opinion on this. Your acct will also.

    When you charge and collect interest (like we do here at LandAcademny), it’s ordinary income (my opinion). As the lender, you should issue a 109x to each of your customers at the end of the year the same way your mortgage lender sends one to you if they are paying interest on the seller financed property.

    The 109x here is intentional. Every time I write an entry on this topic I get tons of opinions on the right way to do it… Please ask your accountant.

    The way we do it works for us and has worked for years may be different for you.

    How it works for you this year may be different. Next year may be different also.

    I hope this gives you the basics on taxes. If you need more info, I’m happy to help.

    Josh George
    Participant
    Post count: 43
    Pro

    @admin

    Great thanks Steve. I’ll keep those things in mind when I speak with my accountant. I’m currently operating as an individual to get started and plan to setup an LLC once things really get rolling. This has been one thing that makes me a little hesitant in all of this is the legalities of running a business/taxes/documentation and how it all relates to real estate transactions and/or terms deals. But I’ll get a better handle on this once I get a few more deals under my belt.

    Thanks again for the advice.

    Patrick and Jessica Young
    Participant
    Post count: 29
    Pro

    This article is helping me a lot this year with taxes and filing / sending in 1099-S forms for purchases and sales. This year I will definitely be putting something in my purchase agreements that put this responsibility into the hands of the seller.
    https://retipster.com/1099-s/

    Matt
    Participant
    Post count: 186
    Pro

    Hey guys, this thread is very helpful. I also reached out to my CPA and he shared this tool if anyone is interested in using it:

    https://track1099.com/

    It looks pretty cool and you can probably integrate it with things or develop some cvs file to upload and share these.

    Personally, I’ll just shoot for 25 properties this year and consider myself exempt 😉

    Sincerely,

    Matt

    John Pitkin
    Participant
    Post count: 59
    Pro

    Can anyone recommend a good tax accountant in Arizona? Preferably someone who is familiar with the land business…

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