Hey guys, Todd Young here. It's getting late, 11:59 p.m. I've been here at the office for a while, since I'm always here during tax season. Anyway, what I want to talk about in this video are 1099s. We've been working for the last month to send those out on behalf of our clients. You know something? We had to send them out ourselves, and I want to talk a little bit about that to make sure people understand what that's for and what it does. If you pay someone more than six hundred dollars in a year for services provided to your business, you are required to send them a 1099. The purpose of this form is that one copy goes to the IRS and one copy goes to the recipient. If they do not report it on their tax return, the IRS will be aware of it and they will receive a letter. It's kind of how the system works. The IRS has stated that the cash economy is their biggest issue. They are not able to collect all the taxes they should because people aren't keeping track of these payments properly. According to our tax code, if you receive income for work that you have done, you are obligated to pay tax on it, regardless of whether you receive a 1099 or not. However, the 1099 system is set up to ensure that people are honest. If you are an employer and you hire someone to do work for you, it is a good practice to obtain a Form W-9 upfront. This form contains the person's name, address, and either their social security number (if they are an individual) or their federal ID number (if they're a business). This provides you with all the necessary information at...
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1099-s inherited property sale Form: What You Should Know
The IRS provides a table showing the adjusted basis in the estate. Jun 4, 2024 — Yes, you must report any income received of any portion you don't report on your 1099-a or 1099-MISC. What is the IRS Form 1099-S Used For and Who Is It For? Sep 25, 2024 — This form is used to identify a sale of real property for proceeds to another entity, if the proceeds from the sale are not includible on the owner's tax return. The form is used by the Internal Revenue Service, the Department of Agriculture, state and local government entities, and private individuals. It's not intended for the financial interests of entities like corporations or trusts as discussed in IRS Pub 594. Sep 22, 2024 — The 1099-S is issued when an entity conducts an ongoing sale of real property and receives a large net proceeds from the sale. The proceeds are taxed as regular income in the year the property is transferred—not when the proceeds are paid to the seller. Because a substantial portion of the income from the sale will be recognized in the following year's income (and not being counted as taxable income in the year it is received), this form can be especially useful for certain types of transactions. In general, 1099-S forms can be used for sales of: Any taxable real property, whether it is subject to the alternative minimum tax (AMT). For more information, see IRS Pub. 544. Any property acquired in the ordinary course of trade or business. Any property subject to the estate tax. Inherited property. The following rules apply when you report a sale or disposition of a property acquired in an intestate succession. Because the proceeds from the sale or disposition of a property acquired in an intestate succession may be includible in your estate, the proceeds will be includible in the estate and taxed when distributed to you, either after a probate or by order of the court, unless: The property was not an interest in real property. The estate contained a gift in intestate succession. You file a form 1040X because the proceeds of the sale were more than 200,000. To determine who is a related entity, see page 22, column (c) on IRS Publication 535, Sale of Real Property, in the Internal Revenue Bulletin, Vol. 57, No.
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