Information Returns – Break Down Form 1099 Series, Part 1

No matter if you are a large corporation or a small business owner, chances are you will need to file an information return of some sort each year. It is not always easy to determine which form is needed for which situation. We have broken down the Form 1099 series to help provide a description of the forms and to which situations they are used.

To help simplify the process, we will be breaking down the information return forms for you. We decided to begin with the Form 1099 series.

Form 1099-DIV, Dividends and Distributions

Banks and other financial institutions use this form to report the dividends and other distributions to taxpayers and to the IRS.

File Form 1099-DIV for each person which apply to any of the following:

  • dividends were paid to (including capital gain dividends and exempt-interest dividends) and other distributions on stock if $10 or more.
  • where you withheld and paid any foreign tax on dividends and other distributions on stock.
  • where you withheld any federal income tax on dividends under the backup withholding rules, or
  • Anyone you paid $600 or more as part of a liquidation.

Form 1099-INT, Interest Income

Form 1099-INT is used to report interest payments made in the course of a trade or business by a nominee/middleman including federal, state, and local government agencies and activities deemed nonprofit.

File this form for each person which apply to any of the following:

  • Anyone you paid amounts reportable in boxes 1, 3, and 8 of at least $10.
  • where you withheld and paid any foreign tax on interest, or
  • where you withheld (and did not refund) and federal income tax under the backup withholding rules regardless of the amount of the payment.

Form 1099-MISC, Miscellaneous Income

Form 1099-MISC is used to report payment for services to vendors and anyone who provided services to a company and received payment.

File this form for each person to whom you have paid during the year:

  • at least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest;
  • at least $600 in:
    • rents
    • services performed by someone who is not your employee
    • prizes and awards
    • other income payments
    • medical and health care payments
    • crop insurance proceeds
    • cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish
    • generally, the cash paid from a notional principal contract to an individual, partnership, or estate
    • payments to an attorney
    • any fishing boat proceeds
  • direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment.

Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRS, Insurance Contract, etc.

Form 1099-R is used for reporting designated distributions of $10 or more of retirement benefits. Can also be used to report death benefit payments made by employers that are not made a part of a pension, profit-sharing, or retirement plan.

File this form for each person to whom you have paid distributions of the following during the year:

  • profit-sharing or retirement plans
  • any individual retirement arrangements (IRAs)
  • annuities, pensions, insurance contracts, survivor income benefit plans
  • permanent and total disability payments under the life insurance contracts
  • charitable gift annuities, etc.

Form 1099-A, Acquisitions or Abandonment of Secured Property

Form 1099-A is used to report an acquisition of interest in property that is security for a debt or abandoned.  You need not be in the business of lending money to subject to this reporting requirement.

Note: An abandonment occurs when the object facts and circumstances indicated that the borrower intended to and has permanently discarded the property from use.

File this form for each person which apply to any of the following:

  • Multiple owners of a single load such as:
    • pools,
    • fixed investments in a single loan, or
    • other similar arrangements,
    • the trustee,
    • record owner, or
    • a person acting in a similar capacity.
  • A government unit, or any of its subsidiary agencies, that lends money secured by property
  • A subsequent holder of a loan is treated as a lender and is required to report events occurring after the loan is transferred to the new holder.
  • If more than one person lends money secured by property and one lender forecloses or otherwise acquires an interest in the property and the sale or other lenders’ security interests in the property, the other lenders must file Form 1099-A for each of their loans.  For example, is a first trust holder forecloses on a building, the second trust holder must file Form 1099-A for the second trust even though no part of the second trust was satisfied by the proceed of the foreclosure sale.

Form 1099-B, Proceeds From broker and Barter Exchange Transactions

Form 1099-B is used to report broker or barter exchange proceeds.

File this form for each person which apply to any of the following:

  • For who, the sold stocks, commodities, regulated futures contract, foreign currency contracts, forward contracts, debt instruments, options, securities futures contracts, etc., for cash
  • Who received cash, stock, or other property from a corporation that the broker knows or has reason to know had its stock acquired in an acquisition of control or had a substantial change in capital structure reportable on Form 8806. or
  • Who exchanged property or services through a barter exchange.

Form 1099-C, Cancellation of Debt

Form 1099-C is used to report a cancellation of a debt.

File this form for each debtor for whom you canceled $600 or more of a debt owed to you if:

  • you are an applicable financial entity, and
  • an identifiable event has occurred.

Form 1099-S, Proceeds From Real Estate Transactions

Use Form 1099-S to report the sale or exchange of real estate transactions that consists in whole or in part of the sale or exchange for money, indebtedness, property, or services of any present or future ownership interest.

File this form for each person which apply to any of the following:

  • Improved or unimproved land, including air space.
  • Inherently permanent structures, including any residential, commercial, or industrial building.
  • A condominium unit and its appurtenant fixtures and common elements, including land.
  • Stock in a cooperative housing corporation (as defined in section 216).
  • Any non-contingent interest in standing timber.

BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.

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