FAQ · OUT-OF-STATE CONDO SELLERS

1099-S Reporting and Home-State Tax Coordination for Out-of-State
Miami Condo Sellers

If you live in New York, California, New Jersey, Massachusetts, Illinois, or anywhere outside Florida, and you sell a Miami condo, two pieces of paper drive your post-closing tax life: the Form 1099-S that the title company files with the IRS, and your home-state income tax return the following spring. They have to agree. When they do not, you get a deficiency notice 12 to 18 months later with interest already running.

This article focuses on what an absentee Miami seller actually needs to know about 1099-S reporting and home-state coordination — what gets filed, who sees it, when your home state finds out, and how to set the closing up so your CPA has clean numbers to work from in April. The underlying mechanics of capital gains, basis, and depreciation recapture sit in the Capital Gains FAQ for out-of-state sellers. Read that first if you have not already; this article assumes the framework and focuses on the reporting plumbing.

One rule drives everything below: the 1099-S is not the tax bill. It is the IRS’s confirmation that the sale happened. Your tax bill is set by your basis, your improvements, your holding period, and your home state — none of which the 1099-S knows about.

Quick answer (the 90-second version)

The title company files Form 1099-S with the IRS reporting the gross sale price of your Miami condo — you get a copy by January 31, the IRS by late February. The 1099-S does not show what you owe; it shows that the sale happened. Florida has no state income tax and no non-resident withholding, so nothing is withheld at the Florida side. Your home state finds out through IRS information-sharing agreements and public property-transfer record cross-checks, usually within 12 to 18 months if you do not report the sale yourself. The Section 121 primary-residence exemption (under IRS Revenue Procedure 2007-12) can suppress the 1099-S filing entirely, but most absentee Miami owners do not qualify because the condo is not their principal residence. US citizens living abroad do NOT have FIRPTA withheld — FIRPTA applies only to non-US persons. Keep all sale-related records for seven years.

What the title company files: Form 1099-S — gross sale price, closing date, your TIN. Automatic. You get a copy by January 31.
What it does NOT show: your gain, your basis, your improvements, or your tax owed. Those live on your Form 1040 and your home-state return.
Florida side: no state income tax, no non-resident withholding. Nothing held back at closing on the Florida side.
Home state side: finds out through IRS data-sharing + property records. Report the sale on your home-state return the same year. Do not wait for them to ask.
Section 121 exemption: can suppress the 1099-S if you meet the 2-of-5-year residence test. Most absentee owners do not qualify because the condo is a second home or rental, not a principal residence.
US citizens abroad: sign the same non-foreign affidavit as a US citizen in Texas. FIRPTA does not touch you. Other expat tax filings (Form 8938, FBAR) are separate and still apply.
Records retention: seven years. Original purchase Closing Disclosure, every capital-improvement receipt, sale Closing Disclosure, the 1099-S, bank records confirming the wire.

If you take one thing from this article: the time to align the closing numbers with your CPA is the week before closing, not the week the 1099-S arrives in January. The Closing Disclosure is the source document; the 1099-S is just one downstream copy.

1. Will the title company tell the IRS that I sold my Miami condo?

Yes. The closing agent (title company or settlement attorney) files Form 1099-S with the IRS for almost every residential resale transaction. The filing reports three things: the gross sale price of the property, the closing date, and your taxpayer identification number (Social Security number for US individuals, ITIN for those without one).

You receive your copy of the 1099-S by January 31 of the year following closing. The IRS receives its copy by late February or March. The filing is automatic — neither you nor the buyer triggers it; the closing agent does it as part of standard post-closing administration.

Two practical points absentee owners frequently get wrong:

The 1099-S goes to the address on the closing docs. If you moved between the time the Closing Disclosure was signed and January, the 1099-S can land at an old address. Update your address in writing with the title company at closing, and again if you move within the next 12 months.
The 1099-S can show up before your CPA is ready for it. January 31 lands before most absentee sellers have even started the prior year’s return. File the 1099-S in a folder you can hand your CPA in March. Do not lose it in the kitchen mail pile.

If you signed at the closing table that you did not get a 1099-S, the title company is also required to send one to you — request a duplicate in writing if January 31 comes and goes without one arriving.

2. Does the 1099-S show how much I owe in taxes?

The default rule is that the seller pays for any assessment voted on or owed as of the closing date. Anything voted after closing is the buyer’s obligation. That is the legal default. Th

No. The 1099-S only reports the gross sales price, not your gain and not your tax. Your actual federal tax depends on:

Your cost basis — what you paid for the condo, plus closing costs at acquisition.
Capital improvements — kitchen renovation, impact windows, structural work, anything that materially extended the life or use of the property. Routine maintenance does not count.
Selling expenses — commission, transfer taxes, title fees on the sale side.
Holding period — short-term (under 12 months) is taxed as ordinary income; long-term (12+ months) is taxed at federal capital gains rates of 0%, 15%, or 20% depending on your income bracket plus the 3.8% Net Investment Income Tax above certain thresholds.
Depreciation recapture (if rented) — if you rented the condo at any point, the depreciation you claimed (or were entitled to claim) is recaptured at up to 25%, separate from your capital gains rate.

The IRS uses the 1099-S to confirm the sale happened so they can match it against your Form 1040. If your 1040 reports the sale, the cross-check is invisible. If your 1040 does not report the sale, the IRS automated system generates a CP2000 notice within 12 to 18 months — essentially “we see this sale on your 1099-S, you did not report it, here is what we calculated assuming zero basis, please pay or respond.”

The CP2000 is solvable but expensive in time and stress. The seller’s job is to file a correct Schedule D and Form 8949 the same spring the 1099-S arrives so the cross-check never triggers.

3. Do I owe Florida state income tax when I sell a Miami condo?

No. Florida does not impose a state income tax on individuals, and Florida does not impose a non-resident withholding on real estate sales (the way California’s 3.33% non-resident withholding works, for example). Nothing is held back at closing on the Florida side for state income tax.

This is one of the few real estate scenarios where Florida law actively helps the seller. A Miami condo sale generates exactly the same Florida-side tax footprint whether you live in Miami, Manhattan, or Munich:

Florida documentary stamp tax on the deed — USD 0.70 per USD 100 of sale price in Miami-Dade County (so USD 7,000 on a USD 1 million sale). Paid by the seller in Miami-Dade by custom. This is a transfer tax, not an income tax, and it appears on the Closing Disclosure as a line item.
No state income tax on the gain. Zero. Whatever federal capital gains you owe is between you and the IRS.
No non-resident withholding. Federal FIRPTA withholding applies to non-US persons (see Q6), but for US citizens regardless of state residency, nothing is held back.

The friction for an out-of-state seller is not on the Florida side. It is on the home-state side, and it is covered next.

4. How does my home state find out about a Florida real estate sale?

State tax agencies have multiple paths to learn about a Florida sale. The two that matter most:

IRS information sharing. The IRS shares 1099-S data with state tax agencies under information-sharing agreements that are routine and largely automated. New York, California, Massachusetts, Illinois, and most other states with an income tax receive the 1099-S feed and run it against their resident filings.
Public property-transfer records. Florida deed records are public and indexable. Several states subscribe to commercial data feeds that aggregate property transfers nationwide. The owner’s home address on the deed (or on the closing docs) is the cross-reference key.

If you do not report the Florida sale on your home-state return, the typical chain of events looks like this:

Year 1, April: You file your home-state return without including the Florida sale.
Year 2, June to November: The state matching system flags the discrepancy.
Year 2, Q4 or Year 3 Q1: You receive a notice of underreported income or deficiency assessment. Interest is already running from the original April due date.
Year 3: Resolution through amended return, with interest, sometimes a penalty depending on the state.

Reporting the sale correctly the first time keeps the cross-check invisible. Most home states will treat the Florida sale as a capital gain taxable at the home-state rate, with credit for any tax paid to other states (typically zero in this scenario because Florida did not tax it). California, Massachusetts, and Hawaii tax capital gains as ordinary income; New York and New Jersey have brackets that approach or exceed federal long-term capital gains rates for higher earners. The math is state-specific — get your CPA the closing documents in March, not October.

5. Can a primary-residence exemption keep the 1099-S from being filed?

In limited cases, yes. Under IRS Revenue Procedure 2007-12, a seller who meets all of the following can sign a closing certification that exempts the transaction from 1099-S reporting entirely:

Owned and used the property as a principal residence for at least 2 of the last 5 years, and
The entire gain is excludable under Section 121 (USD 250,000 for single filers, USD 500,000 for married-filing-jointly), and
No portion of the property has been used for business or rental for which depreciation was claimed.

If all three are true, the closing agent provides a “Certification for No Information Reporting on the Sale or Exchange of a Principal Residence” at closing, you sign it, and the 1099-S is not filed.

Most absentee Miami condo sellers do not qualify. The typical absentee profile is:

The condo is a second home, an inherited property, a future-retirement plan, or a rental — not a principal residence.
The 2-of-5-year residence test is not met because the owner lives in another state.
Even where the residence test could be met, gain often exceeds the Section 121 exclusion limit on appreciated Miami property.

The practical conclusion: expect the 1099-S to be filed. If you think you qualify for the exemption, raise it with the title company and your CPA two to three weeks before closing, not at the closing table. The certification has to be prepared and signed in coordination with the closing agent; it is not something to negotiate on the day.

One narrow scenario where the exemption does apply to an out-of-state pattern: a seller who lived in the Miami condo as their principal residence for 2+ years, moved out of state within the last 3 years, and is now selling. The 2-of-5-year window is still open. Worth a conversation with your CPA.

6. I am a US citizen living abroad. Does FIRPTA apply to me?

No. FIRPTA (the Foreign Investment in Real Property Tax Act) applies only to non-US persons — foreign nationals selling US real estate. A US citizen who happens to live in London, Berlin, Singapore, or Mexico City is still a US person for FIRPTA purposes and signs the same non-foreign affidavit at closing as a US citizen living in Houston.

The non-foreign affidavit (also called the FIRPTA affidavit) is a short closing document where you certify, under penalty of perjury, that you are a US person (US citizen or resident alien with a Green Card or substantial presence). When signed, no FIRPTA withholding occurs. The buyer is protected, the title company is protected, and the closing proceeds.

A few clarifications that come up repeatedly with US expats selling Miami condos:

Passport-based citizenship is enough. You do not need to be currently living in the US, currently filing US taxes from a US address, or registered to vote anywhere specific. US citizenship at the time of closing is the test.
Other expat tax obligations are separate. As a US citizen abroad, you still file Form 1040 reporting worldwide income, FBAR (FinCEN 114) for foreign bank accounts above USD 10,000 aggregate, and possibly Form 8938 (FATCA reporting). The Miami condo sale flows through your 1040 normally — it is not exempted by foreign residence.
The dual-status year edge case. If you renounced US citizenship during the year of sale, the rules change significantly — expatriation tax (Section 877A) and FIRPTA both can apply depending on the timing. This is a CPA conversation, not an article footnote.
Foreign tax credits may apply on your home country side. If your country of residence taxes the Florida gain (most countries with a worldwide income tax system do), a US-foreign tax treaty may grant you a credit. Pull the relevant treaty article with your home-country tax advisor before closing.

For a US citizen living in Germany, the German tax side of the sale is covered in the German Tax Side FAQ — the FIRPTA-does-not-apply rule does not change the German residence-based tax exposure. Two separate questions, two separate answers.

7. How long should I keep records related to the sale?

Plan on seven years. The reasoning, from least to most aggressive timeline:

IRS general statute of limitations: 3 years from the filing date or due date of the return that reports the sale, whichever is later.
IRS extended statute of limitations: 6 years if you understate gross income by more than 25%. The IRS reserves the right to look back further when there is an apparent underreporting.
State statutes vary. New York: 3 years standard, 6 years for substantial understatement. California: 4 years standard, indefinite in cases of fraud or non-filing. Massachusetts: 3 years standard, 6 years for substantial understatement.
Fraud has no statute. Civil fraud claims have no time limit; the IRS can reach back as far as needed if fraud is alleged.

Seven years covers the standard cases with margin. The records to keep, in priority order:

Original purchase Closing Disclosure (or HUD-1 if older). Establishes acquisition basis.
Every capital improvement receipt and invoice. Kitchen renovation, impact windows, structural work, anything that added to basis.
Sale Closing Disclosure. Establishes gross sale price and seller-side costs.
Form 1099-S. The IRS’s record of the sale; should match the Closing Disclosure gross sale price.
Bank records confirming receipt of the wire. Useful in the rare case the IRS questions the timing or amount.
Annual property tax bills and HOA assessments. Useful if the building had a special assessment that was rolled into basis or treated as a deductible expense.
Rental history (if applicable). Annual Schedule E filings, depreciation schedules, dates the condo was placed in or out of service.

Keep these in cloud storage with at least one offline backup. Absentee owners frequently lose paper records in moves between states; do not be one of them.

8. Common mistakes

Ignoring the 1099-S because “Florida has no state income tax.” Florida does not tax the sale. Your home state almost certainly does. The 1099-S is what tells your home state the sale happened.
Assuming the 1099-S is the tax bill. It is not. The 1099-S reports the gross sale price; your actual tax depends on basis, improvements, holding period, depreciation recapture, and your home state’s rate.
Not coordinating with your CPA before closing. The Closing Disclosure is the source document for both the federal and state tax filings. Send a copy to your CPA the week of closing, not the following March.
Trying to use Section 121 without meeting the 2-of-5-year test. The principal-residence exemption is narrow. Most absentee owners do not qualify; pretending otherwise creates a worse problem than just paying the tax.
Confusing FIRPTA with home-state withholding. FIRPTA is federal and applies only to non-US persons. It has nothing to do with whether your home state taxes the gain.
Letting the 1099-S land at an old address. Update your mailing address with the title company at closing and again if you move within 12 months. A lost 1099-S does not eliminate the IRS’s copy; it just makes April harder.
Throwing out basis records after the sale closes. Keep everything for seven years. The audit, if it comes, comes 18 to 36 months after closing — long after most sellers have purged the file.

The sequence for out-of-state sellers on the 1099-S and home-state tax track

30-60 days before closing: Send your CPA the Closing Disclosure draft, the original purchase Closing Disclosure, and your capital improvements list. Confirm your filing posture (resident state, primary residence vs second home, rental history if any) so the basis calculation is locked in before the wire hits.
Week of closing: Confirm the address the title company will use for the 1099-S mailing. If you have moved or are about to move, give them the new address in writing.
Closing day: Sign the standard non-foreign affidavit (for US persons) or coordinate FIRPTA paperwork (for non-US persons — see the FIRPTA FAQ). Verify the gross sale price on the Closing Disclosure matches what you have been planning around — this is the number that will appear on the 1099-S.
30 days post-closing: File your closing documents in cloud storage. Send your CPA the executed Closing Disclosure if you have not already.
January of the following year: The 1099-S arrives by January 31. Verify the gross sale price matches the Closing Disclosure. Forward to your CPA.
March to April: CPA prepares Form 8949, Schedule D, and your home-state return. The sale appears on both. The 1099-S, the Closing Disclosure, and your basis records support the filing.
Year 2: Watch for any IRS or state correspondence. A CP2000 within 12-18 months is the signal that something did not match. Most absentee sellers who filed correctly the first time never see one.

How does this fit into Tom's Net + Risk Review?

The free 30-minute Net + Risk Review for out-of-state Miami condo owners covers the US-side real estate mechanics of your sale: net proceeds modeling, the sequence of inspections and HOA records to pull before listing, lender treatment of the building, and how the closing will actually run from your home state. Tax questions — basis calculation, depreciation recapture, home-state rate, Section 121 eligibility, expat coordination — go to your CPA, and I will hand off the Closing Disclosure and any building-specific documents your CPA needs to do their work. The split is clean: real estate mechanics with me, tax filings with your CPA.

Disclaimer: Nothing in this article is tax or legal advice. IRS rules and state tax regimes change; thresholds, statutes, and forms get updated. Verify the current status with a CPA licensed in your home state — and, for non-US persons or US citizens abroad, a CPA with international tax experience — before relying on this guidance for a specific transaction.

Related FAQs

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1099-S Reporting and Home-State Tax Coordination for Out-of-State Miami Condo Sellers