The short answer
The settlement agent files Form 1099-S in your name even though the intermediary received the money, because section 6045(e) makes the person responsible for closing the reporting person and you are the transferor. The form is not wrong when box 2a shows the contract price; the instructions also permit a zero entry with the box 6 property-received check for an exchange with no reportable proceeds. Form 8824 is where the figure is explained, and a CP2000 letter is the IRS asking for that explanation.
At a glance
| Who files | The settlement agent named on the Closing Disclosure or other settlement statement; otherwise the lender, seller's broker, buyer's broker, then the buyer |
|---|---|
| Transferor | You, not the intermediary; a disregarded LLC reports under its owner |
| Box 2a | Total gross proceeds; includes a mortgage paid off or assumed at settlement |
| Exchange entry | -0- in box 2a with an X in box 6 when no gross proceeds are reportable |
| Box 7 | Checked when the transferor is a foreign person |
| Deadlines | Copy to the seller by February 15; to the IRS by February 28 on paper or March 31 electronically |
| Revision | The December 2026 form reports 2026 closings and adds a digital-asset box 2c |
| Exempt sellers | Corporations, government units and exempt volume transferors; residences under the section 121 certification |
The settlement agent files it, in your name, even though the intermediary took the money
Section 6045(e) requires the real estate reporting person to file a return for every real estate transaction and names that person in order: the person, including any attorney or title company, responsible for closing; then the mortgage lender; the transferor's broker; the transferee's broker; and finally the transferee. Reg. section 1.6045-4 carries the same ordering and the instructions say that where a Closing Disclosure or other settlement statement names a settlement agent, that agent is the reporting person.
The transferor is the owner who conveyed the property. An intermediary that never takes title is not the transferor, and the direct-deeding rule in Reg. section 1.1031(k)-1(g)(4) does not change that. The closer will ask for your TIN on Form W-9 no later than closing, keep it for four years, and may truncate it only on your copy.
Some sellers never get one. The instructions exempt transactions where the transferor is a corporation, a governmental unit or an exempt volume transferor, and a sale of a principal residence for $250,000 or less, or $500,000 with a married certification, when the seller certifies that the whole gain is excludable under section 121. A rental or commercial property sold by an individual, trust, partnership or LLC is reportable.
What the boxes say: gross proceeds, the property-received check, the foreign-seller check
Box 1 is the closing date, which on a Closing Disclosure is the disclosure date and otherwise the earlier of title transfer or the shift of the burdens and benefits of ownership. Box 2a is total gross proceeds, generally the contract price, and the instructions treat a mortgage paid off at settlement, or assumed by the buyer, as cash received. Box 2b is cash gross proceeds and box 2c, new for 2026 closings, is digital-asset proceeds.
Box 6 is the exchange flag. It is checked when the transferor received or will receive services or property other than cash, notes or digital assets as part of the consideration, and the instructions add: if you are reporting a like-kind exchange for which no gross proceeds are reportable, enter -0- in box 2a and an X in box 6. Closers read that two ways, and a form showing the full price with box 6 checked is as common as one showing zero. Neither is a mistake you need corrected; both reconcile on Form 8824.
Box 7 is checked when the seller is a nonresident alien or a foreign partnership, estate or trust, which is the signal that the FIRPTA rules on Form 8288-B at closing applied. Box 4 reports a residence's real estate tax paid in advance and charged to the buyer; it does not apply to investment property.
Form 8824 is where the 1099-S figure is explained
The Instructions for Form 8824 (2025) build the reconciliation in Part III. Line 15 is cash received, the fair market value of other property received and net liabilities assumed by the other party, reduced by exchange expenses. Line 16 is the fair market value of the like-kind property received, line 17 their total, line 18 your adjusted basis plus exchange expenses and net amounts paid, line 19 the realized gain, and line 20 the recognized gain, the smaller of lines 15 and 19.
Line 17 is the bridge. The 1099-S gross proceeds, less what the intermediary spent on replacement property, less the transactional items, should land on line 15 as boot, while the replacement price lands on line 16. The walk-through on how to fill out Form 8824 covers each line; recognized gain then moves to Form 4797 or Schedule D as explained on boot, recapture and Form 4797.
Several replacement closings, including a split into DST interests, still produce one Form 8824 with a statement, as described on Form 8824 for multiple properties and DSTs. Several sellers produce several 1099-S forms, one per transferor, with joint spouses treated as one.
A hypothetical reconciliation
Hypothetical. You sell a rental for $900,000 with no mortgage. The 1099-S shows $900,000 in box 2a and box 6 checked. Commissions and title charges of $54,000 come out at closing and $846,000 goes to the intermediary, which buys a $1,000,000 replacement using those funds and a $154,000 loan.
On Form 8824, line 15 is zero: no cash came to you, no non-like-kind property, and the $54,000 of exchange expenses would reduce any boot that existed. Line 16 is $1,000,000, line 18 is your basis plus any expenses not already used on line 15, and the realized gain on line 19 is deferred in full on line 24. The $900,000 on the 1099-S is accounted for as $846,000 of replacement purchase and $54,000 of expenses. Run your own numbers with your CPA.
Had the intermediary returned $20,000 at the end, line 15 would start at $20,000 and the expenses would bring it to zero; the netting is the reason exchange expenses matter even when the cash was small.
The CP2000 letter: the IRS matching the 1099-S against your return
The IRS computer compares the 1099-S to what you reported. If it finds no Form 8824 and no Schedule D or Form 4797 entry, it issues a CP2000 notice proposing tax on the gross proceeds. The IRS page describes the notice as income or payment information from third parties that does not match the return, states that it is not a bill, and asks for a reply by the date listed with the response form, signed, stating whether you agree or disagree and attaching supporting documents by upload, fax or mail.
The reply is Form 8824 with the exchange agreement, the two settlement statements and, if the replacement closed the following year, the explanation on the 1031 tax-year straddle. The usual cause is a return filed without Form 8824, or an exchange reported in the year the replacement closed rather than the year the relinquished property was transferred.
Keep the file. The records that answer a CP2000 are the same ones listed on 1031 audit risk and the records to keep: the 1099-S, the Form W-9, both closing statements, the exchange agreement, the assignment and notices, and the written identification.
Related questions
My 1099-S shows the whole price even though the intermediary got the money. Should I ask for a corrected form?
Not usually. The instructions allow a zero entry for an exchange with no reportable proceeds, but a full-price entry with box 6 checked is also an accepted practice. Form 8824 reconciles either version.
Does the intermediary issue me anything?
The intermediary is not the reporting person and does not file Form 1099-S. It will give you an accounting of funds received and disbursed, which is what you use for lines 15 and 16 of Form 8824.
What year does the 1099-S belong to when the exchange straddles two tax years?
The 1099-S carries the closing date of the relinquished property, and Form 8824 is filed with the return for that year. The replacement that closes the next year is reported on that same Form 8824.
I sold through a single-member LLC. Whose name is on the 1099-S?
A disregarded LLC is not the transferor for tax purposes; the owner's name and TIN belong on the form, which is why the closer asks for a Form W-9 from the owner.
What happens if I ignore a CP2000?
The IRS treats silence as agreement to the proposed change and assesses tax on the gross proceeds. Replying by the date on the notice with Form 8824 and the closing statements is how the proposal is withdrawn.
Sources
Checked against these publications on September 30, 2026. Rules and figures change; confirm the current version with your CPA or attorney before you act. This page is general information, not tax or legal advice.
- 26 U.S. Code section 6045(e), Return required in the case of real estate transactions
- Reg. section 1.6045-4, Information reporting on real estate transactions
- IRS, Instructions for Form 1099-S (12/2026)
- IRS, Form 1099-S, Proceeds From Real Estate Transactions (Rev. December 2026)
- IRS, Instructions for Form 8824 (2025), Part III
- IRS, Understanding your CP2000 notice