What Are the Differences Between the 1099C & 1099S?

When you receive payments throughout the tax year, it is important to report the payments to the IRS. Generally, employers report wages to the IRS using form W-2. However, if the payments were for anything other than wages, the payee must report the payment using form 1099. If you received a 1099-C and 1099-S at the end of the tax year, it is important to know the difference between the forms before you begin preparing your income tax return.

Definition

Generally, if you receive more than $600 in monetary gain as of September 2011, you are required by law to report your income to the IRS. There are several different 1099 forms available to taxpayers, including form 1099-MISC to report nonemployee compensation; form 1099-DIV to report dividends and distributions; form 1099-INT to report interest income; and form 1099-G to report government payments. Each 1099 form has its own purpose and financial requirements.

1099-C

A 1099-C is a tax form generally used to report a write-off of an unpaid portion of debt that is at least $600. If you receive a 1099-C, a creditor is using the form to report that you did not pay a debt and it is writing off the debt. Because you failed to pay the debt, the IRS considers the debt as income, or money that you gained, and you must report the amount on your taxes.

1099-S

If you sell real estate and the sale results in a profit of over $600, you will receive a 1099-S at the end of the year. The sale of real estate can include air space, land, permanent structures and stock in a cooperative housing corporation. Generally, the person closing the sale must provide you and the IRS with a copy of the form 1099-S. The IRS considers the profit as income and you must report the proceeds on your income tax return.

Reporting the Income

When you receive a 1099-C or 1099-S, you must use tax form 1040 to report the income. Generally, you will report the amount in box 2 in the line titled "Other Income" on form 1040. If you received both a 1099-C and a 1099-S, add the amount of form 1099-C, box 2 and form 1099-S, box 2 together and enter the total in the line titled "Other Income."

References

• IRS.gov: Tax Topic 352 - Which Form – 1040, 1040A or 1040EZ?
• IRS.gov: Instructions for Form 1099-C -- Specific Instructions
• IRS.gov: Instructions for Form 1099-S
• Internal Revenue Service. "General Instructions for Certain Information Returns (2019)." Accessed Jan. 9, 2020.
• Internal Revenue Service. "Am I Required to File a Form 1099 or Other Information Return?" Accessed Jan. 9, 2020.
• Internal Revenue Service. "Instructions for Form 1099-DIV (2020)." Accessed Jan. 9, 2020.
• Internal Revenue Service. "Form 1099-DIV," Pages 1-8. Accessed Jan. 29, 2020.
• Internal Revenue Service. "Instructions for Forms 1099-INT and 1099-OID (2020)." Accessed Jan. 9, 2020.
• Internal Revenue Service. "Form 1099-INT," Pages 1-8. Accessed Jan. 29, 2020.
• Internal Revenue Service. "About Form 1099-MISC, Miscellaneous Income." Accessed Jan. 25, 2020.
• Internal Revenue Service. "Form 1099-MISC," Pages 1-8. Accessed Jan. 29, 2020.
• Internal Revenue Service. "About Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc." Accessed Jan. 9, 2020.
• Internal Revenue Service. "Form 1099-R," Pages 1-11. Accessed Jan. 29, 2020.
• Internal Revenue Service. "Publication 505 (2019), Tax Withholding and Estimated Tax." Accessed Jan. 9, 2020.

Show More