U.S. · Tax forms
1099-S box 2 gross proceeds.
What the closing statement reports for a home sale and what it leaves out.
Form 1099-S reports a real estate sale to the IRS. Box 2 is the gross proceeds, generally the sales price, and it is not reduced by commissions, deed preparation, advertising or legal costs you paid. A 1099-S does not mean you owe tax: you may exclude up to $250,000 of gain on your main home ($500,000 on a joint return) if you meet the ownership and use tests, but you must still report the sale on Form 8949 when you receive a 1099-S.
Look up a 1099-S box
Result
Form 1099-S boxes
| Box | Meaning | Where it goes (per the IRS instructions) |
|---|---|---|
| Box 1 | Date of closing: The Closing Disclosure date if one is used; otherwise the earlier of the date title transfers or the date the economic burdens and benefits of ownership shift. | The closing date of the sale. |
| Box 2 | Gross proceeds (2a total, 2b cash, 2c digital assets on the 2026 form): Total cash received, consideration treated as cash, and for 2026 the value of digital assets received, generally the sales price. Not reduced by seller expenses such as commissions, deed preparation, advertising or legal. Includes the stated principal of a note, a note or mortgage paid off at settlement, and liabilities assumed by the buyer. | Form 8949 when the sale has to be reported; the form is where gain or loss is figured. |
| Box 3 | Address or legal description: The property address with city, state and ZIP; a legal description such as section, lot and block if needed. For timber, “Timber royalties” or “Lump-sum timber payment”. | Identifies the property. |
| Box 4 | Buyer’s part of real estate tax: For a residence, the real estate tax paid in advance that is allocable to the buyer. Not required for taxes paid in arrears. | For information; the closing statement shows how the tax was split. |
| Box 5 | Reserved: Reserved for future use. | None. |
| Box 6 | Received property or services: An X if the seller received or will receive property or services, other than cash, notes or digital assets, as part of the price. A like-kind exchange with no reportable gross proceeds shows -0- in box 2 and an X here. | Gross proceeds in box 2 leave this property or these services out. |
| Box 7 | Foreign person: An X if the seller is a nonresident alien, foreign partnership, estate or trust. | See Form 8288 for withholding. |
| Boxes 8a-8d | Digital asset received (2026 form): Digital token identifier, name, number of units and date of any digital asset received as consideration. | Only for sales paid in digital assets. |
Box 2 is not your gain
Because gross proceeds are not reduced by the seller’s costs, a 1099-S usually shows more than you actually walked away with. The IRS Schedule D instructions say to report a main-home sale on Form 8949 if you cannot exclude all the gain or if you received a 1099-S. If you meet the two tests, you owned the home for two years or more and lived in it as your main home for two years or more during the five years ending on the sale date, and you have not excluded gain on another main home in the two years before, you can exclude up to $250,000, or $500,000 on a joint return where both spouses meet the use test and one meets the ownership test.
Even a loss on a personal-use property must be reported on Form 8949 if you received a 1099-S. The loss is not deductible, and the Schedule D instructions tell you to enter code L for it.
Worked example
Lena sells her main home for $450,000. Box 2 shows $450,000, even though she paid $27,000 in commission and $3,000 in legal costs. The 1099-S does not reduce the figure for them. She reports the sale on Form 8949 because she received a 1099-S, and if she meets the ownership and use tests she can exclude up to $250,000 of any gain.
Edition note
The instructions read are the December 2026 revision, which applies to 2026 transactions reported in early 2027. It adds digital assets (boxes 2c and 8a to 8d), and the box numbers after box 3 are not the same as on earlier forms. The IRS text for box 4 still says the buyer’s tax is “reported in box 6”, a leftover from the earlier numbering. If your form is older, match boxes by their printed labels, not by number.
More form decoders
Use the home sale capital gain exclusion calculator to estimate the exclusion and the capital gains tax calculator for tax on any gain left over.
Sources
- Instructions for Form 1099-S: Specific Instructions: boxes 1 to 8d. Read November 2, 2026.
- Instructions for Schedule D (Form 1040) (2025): Sale of Your Home; Certain Nondeductible Losses. Read November 2, 2026.
IRS pages last reviewed April 30, 2026. The 1099-S instructions read are the 12/2026 revision.
Frequently asked questions
What is box 2 on Form 1099-S?
It is the total gross proceeds from the real estate sale, generally the sales price. On the 2026 form it is the total of box 2b cash and box 2c digital assets.
Does 1099-S box 2 include my closing costs?
Gross proceeds are not reduced by seller expenses such as commissions, deed preparation, advertising or legal fees. You subtract those yourself when figuring gain on Form 8949.
Do I owe tax because I got a 1099-S?
Not necessarily. If you meet the ownership and use tests you may exclude up to $250,000 of gain on your main home, or $500,000 on a joint return. You still report the sale on Form 8949 when you receive a 1099-S.
What if I sold at a loss and got a 1099-S?
A loss on personal-use real estate is not deductible, but the sale must be reported on Form 8949. The Schedule D instructions say to enter code L for the nondeductible loss.
What does box 4 mean?
For a residence it is the real estate tax paid in advance that is allocable to the buyer. It is not required for taxes paid in arrears.
Not tax advice
This page summarizes IRS instructions, mostly written for the people who prepare the form, and is not tax, legal or financial advice. The payer, a CPA or an enrolled agent can confirm what a box or code means for your return. Everything runs in your browser; nothing you enter is sent anywhere.