Below is a list of the most common customer questions.
If you can’t find an answer to your question, please don’t hesitate to reach out to us.
What is the purpose of Form 1099-LTC?
The purpose of Form 1099-LTC is to report sales of an asset, such as a security or financial instrument, acquired by a C corporation or S corporation in the ordinary course of its business by a sale to a limited partner, CFC, U.S. shareholder, or partner. You are a partner in a partnership when you share in the profits (or losses) of the partnership in a partnership with other partners. If you are a partner, you are considered both the purchaser and the seller in the asset sale. If you are a limited partner, you are considered the purchaser. In addition, if the sale is one where all partners receive the sales proceeds, you may be required to file Form 1099-LTC.
When should I file Form 1099-LTC?
Filing Form 1099-LTC is an information reporting requirement for S corporations and other C corporations in the income year you sell the asset (or assets) to the selling partner, CFC, U.S. shareholder, or partner; as a C corp, you are the seller if you sell the asset to your own corporation or to one of your partners (or to your limited liability company), and you received less than 50% of the sale proceeds. If you are a limited partner, you are considered to be the seller, even if you received the sale proceeds to be distributed to another member of your partnership. You should file 1099-LTC for the year of sale.
Is it required to file Form 1099-LTC?
No. Form 1099-LTC is not a filing requirement for S corporations or other C corporations. However, it is required to report the sale of a property or asset acquired in the ordinary course of the corporation, and a property or asset acquired by or for the corporation as a member which is sold through a partner. Reporting a sale to a non-corporate partner (for example, for the sale of stock) must be carried out as a separate report. You are the S corporation's reporting partner from the time of sale to your corporation at which time you pay the income tax on the 5,000 in proceeds received up to the date of sale.
As a C corporation, you are considered both the purchaser and the seller of the sale of a property or asset acquired in the ordinary course of your business of doing business with one or more other members of a partnership.
Who should complete Form 1099-LTC?
Businesses that are engaged primarily in retail purchases. In the business of selling goods to consumers, merchants should complete Form 1099-LTC when a customer's purchase of goods includes any of the following: an item with a fixed price and a cash price; a product with a free or reduced price; and an item which is consumable or reusable. These three scenarios are commonly referred to as markups, coupons or other discounts.
For more information on what constitutes “sale,” refer to Pub. 550, Income Tax Withholding for Sales and Other Dispositions of Property or Services.
If a merchant sells to a charity that is eligible for an exemption from federal income tax, the IRS will accept Form 1098 from the charity for purposes of computing the taxable proceeds of the sale.
Who pays the tax?
The seller or the buyer usually pays tax on the sales price of the goods sold by completing Form 1099-LTC, but there may be circumstances in which either party must pay sales tax (Form 5471).
Sales to the following individuals are exempt from federal income tax due to a governmental exemption:
Veterans or former members of the Armed Forces and their spouses
Members of the Merchant Marine and Merchant Mariners Insurance companies
Members of the Merchant Marine and Merchant Mariners Railroad companies, and for those who work in the United States Navy, the Merchant Marine Service (including Merchant Marines Merchant Mariners Service) and Merchant Marine Reserve Service
Members of the Merchant Marine or Merchant Mariners, and their spouses;
Residents of Guam or Puerto Rico;
Persons who engage in business at, or for, an individual at a location outside the United States and who are not covered by the exemption
How much income tax should be withheld from the sale of goods, services, and property?
There are two different taxes that can be withheld from sales to customers who are eligible for the tax exemption for nonprofits (and certain other exempt individuals).
The first exemption is the fair market value of the good, product, or service when it was purchased, and the second exemption is the price that a person would pay for the good, product, or service if he or she were the purchaser of that good, product, or service.
Each year, the IRS releases a Revenue Procedure, Revenue Procedure 2015-50, for Form 1099-LTC.
When do I need to complete Form 1099-LTC?
A business must file Form 1099-LTC on a quarterly or annual basis after March 15. After that date, Form 1099-LTC that's required to be sent to the IRS for Form 1099-G filed on a quarterly or annual basis, may be sent only if your business receives one or more qualifying sales revenue reports during the preceding five-year period.
Does Form 1099-LTC report sales that occur outside the United States?
Yes. It includes sales from within, to, or from sources within a foreign country, either directly within any country or from sources within a country. It doesn't include sales for which a return wasn't filed.
The IRS expects that Form 1099-LTC will be sent by the middle of March in the following years:
Annual report — January 2016
Invoicing report — March 2016
Form 1099-K — quarterly report- January 2016 – March 2016
Invoicing report — March 2016
How do I report sales in Canada to avoid double reporting?
Don't report Canadian sales for the entire year. Instead, file Form 1099-CX in the year of the sale.
The Form 1099-CX is completed and filed with your tax return as a foreign source of income.
The Form 1099-CX is completed and filed with your tax return as a foreign source of income. Form 1099-K is not used for sales in Canada. This form can be used to report sales in Canada, as long as you are filing a new federal tax return.
Is there a penalty for not reporting income from foreign sources?
If you fail to report income from certain sources in the year, you don't suffer a penalty, unless you are a U.S. person. In that case, the penalties generally apply.
Report all sales, prizes or other noncash benefits from foreign sources on Form 1045.
If you are a U.S. person, the penalties from the failure-to-report are discussed later, within the FAQ section about taxes due on income paid to certain foreign countries.
How do I declare goods and services I export from the U.S.?
The U.S. is required to have a reciprocal agreement with Canada concerning export from the U.S.
Can I create my own Form 1099-LTC?
Yes, you should be able to create your own Form 1099-LTC. This does not mean that you will be able to withdraw your earnings as they're a loan you've made to your brokerage. We make your earnings available to use when you want.
Is there anything that investors would need to keep in mind when filing an investor form 1099-LTC?
In short, nothing. In our experience, it's the same for all forms investors file.
Are investor form 1099-LTC tax returns required?
Yes, you must file an investor form to collect a tax return. There is no penalty for not filing an investor form.
What is the deadline for filing investor form 1099-LTC?
The deadline for filing investor form is the same as the investor filing their personal tax return.
How do I report my investment earnings?
Before reporting earnings please report a reasonable basis for each purchase and sale of your securities and keep a copy for your records. If you purchase over 250,000 of securities in a single year it is important that you have the IRS Form 8620 (Annual Report of Foreign Bank and Financial Accounts) in your possession, and include Form 8833, Statement of Foreign Bank and Financial Accounts, in each account that you open on your behalf. It is important to maintain copies of all Form 8620 and Form 8833 for your records. If you are under audit, you may want to consider doing a Form 8039, Statement for Examination Purposes, to report your income and expenses for the year. In addition, it is a good idea to submit a copy of the Form 1099-LTC for review.
Do you offer investor filing services?
No, we do not. But, we may be able to answer your questions!
What is a Form S-1?
Form S-1 is a document you are able to use for your corporate registration and provides a means of disclosing information about your company. The only requirements regarding disclosure are that you file the form no later than 90 days before the public offering date or, more commonly, 60 days before the first dividend being declared on the shares, whichever is earlier.
Is a Form S-1 considered a 'public offering'?
Generally, Form S-1 is not considered a 'public offering.
What should I do with Form 1099-LTC when it’s complete?
If you are not a U.S. citizen, be sure that the information you enter on the Form 1099-LTC is accurate. If you're a U.S. citizen, and you receive Form 1099-LTC or Form 1099-INT, you should submit the information for correction (in some cases you may have to file a Form 8826 to correct this). The information you enter on the Form 1099-LTC or Form 1099-INT should match the information you entered when you registered for a certificate of foreign status.
If you are a nonresident alien or a resident alien of a tax haven, see section 1031(j)(1) and (2) of the IRA for information regarding payment of U.S. withholding taxes and how to request payment to the U.S. Treasury. The IRS must receive the requested information by December 31 of the year following the year for which you received the Form 1099-LTC or Form 1099-INT.
When you file Form 6252 (a return of tax paid) for a year for which you're filing Form 1099-LTC or Form 1099-INT, use the following table to calculate tax withheld on your personal income tax return. If you do not have access to the information in this table, include that amount on line 1 of Form 6251.
If you received Form 1099-DIV/LTR in the year for which you're filing this return, and you filed Form 6251 for that same tax year, you'll have to figure the tax withheld on lines 1 and 3 of Form 6252. Make adjustments to those amounts accordingly on the following form.
Note Any refund of excess contributions made in the year of the contribution is reported on Form 1040, U.S. Income Tax Return.
See Pub. 544 for information on how a child may report credit or refund payments.
A child doesn't meet the criteria for this entry if both of these apply:
A child isn't a U.S. citizen, if the child meets the requirements for a child born or adopted in violation of a U.S. law or regulation.
You meet both of these special rules for this entry even if your child doesn't meet the U.S. residency requirements.
How do I get my Form 1099-LTC?
The IRS has posted a list of Form 1099-MISC and Form 1099-T.
2. The list can be found HERE.
3. To get a copy of Form 1099-MISC, visit IRS.gov/Forms1099 or call.
4. To get a copy of Form 1099-T, visit IRS.gov/Forms1099 or call.
5. Both forms can be filed online and print them.
6. To file a joint Tax Return, read “How to Get Child Tax Credits and Credits for Dependents” above.
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How Much of my Income Does the IRS Want to See?
The IRS asks that you provide a reasonable estimate of your income. The IRS may ask for additional information if they suspect fraud or abuse of the tax system. The agency may also request additional documents to support the estimate. If the IRS determines that the estimate is not reasonable, they make that determination by analyzing your income and income tax filings.
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How Do I Check the Status of the Form 1099-MISC/T?
The IRS will notify you of the status of your Form 1099-MISC/T by the last day of the previous month. You can track your TIN and IRS forms in My Account or Taxes and Accounting.
To determine the status of your Form 1099-MISC, you may request the paper Form 1099-MISC or IRS electronic TECS-MISC and compare the report number with the report number of your IRS form.
If the report number matches the IRS form, there is no need to wait for notification of the status. Your Form 1099-MISC will show up on your forms within 4 weeks.
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How Do I Check the Status of the Form 1099-MISC and Tax Due or Payment Due?
To check the amount of tax due or payment due, enter the Form 1099-MISC and complete the information provided. For more detailed information about Form 1099s, visit IRS.gov/Forms1099.
For more information about IRS tax, visit IRS.gov/ebatax.
What documents do I need to attach to my Form 1099-LTC?
Your annual Form 1099-LTC information must be included on any Form 1099-LTC filed for the year. On the 1099-LTC accompanying any itemized statement showing the amount of itemized deductions, you must specify whether the entire amount of your itemized deductions is included within the amount of the cash basis exclusion. If the itemized deductions were received directly from the seller, or are from a payment by you to the seller, the amount of itemized deductions does not have to be included on line 2a of your Form 1099-LTC.
For additional information on the format and content of Form 1099-LTC, go to Line Number 25 of Topic 3 — Other Information in Part III of Your Form 1099-LTC.
Line 1 — Line 2
Enter the amount of the itemized deductions claimed in Item 3 of Part II of your Form 1099-LTC, even if you are reporting multiple expenses. The line 2a line on your Form 1099-LTC will report the amount of itemized deductions received directly from the seller (including amount paid by the seller) or are from a payment to the seller for the total amount. For example, if a seller is paying less than an amount it expects to receive, that portion should not be included in line 2a on your Form 1099-LTC.
For additional information on the format and content of Item 3 of Part II of Form 1099-LTC, go to Line Number 25 of Topic 3 — Other Information in Part III of your Form 1099-LTC.
Line 3-Line 4
If you received any payment to offset or reduce the income that you reported for the year on line 2a of your Form 1099-LTC, enter it. Enter this as follows.
(1) If you paid cash or received a cash equivalent, enter the total amount paid or received as the basis excluding any amount paid for the taxable year for property used, and not used by, you in your trade or business. Except for payments of property used, and not used, by individuals, if you do not use any part of the amount to pay the tax, you should enter “D” in row (3). If you paid a cash equivalent, enter it as shown on the box of Form 1099-G (and paragraph (b)(1)(v) or the explanation attached to that form) that you received.
What are the different types of Form 1099-LTC?
Many of the forms you receive when you sell stock or real property involve the tax treatment of an exchange of your interests in property for the interests in an “equity interest.” An “equity interest” is a nonqualified investment security.
The different types of equity interests include:
Employee Stock Purchase Plan
Employee Stock Ownership Plan (ESOP)
Defined Contribution Pension Plan, and
Roth IRA (Individual Retirement Amusement)
When you sell shares of equity interest in property, the rules for taxing the change in equity interest is the same as when you sell the interest itself. See the following example.
Example: Bob and Jane are shareholders in General Electric. They each own 50% of the common stock. In the spring of 1999, Jim goes on strike for a wage increase of 4% (the equivalent of one share of stock). Bob and Jane sold their shares of equity interest in GE and Jim bought the remaining common stock from them. Jim and the IRS believe they no longer own their equity interest, as they were short of common stock to start with. Thus, he would expect the short sale to be exempt from the capital gain taxes he would otherwise owe on the equity interest he sold.
The short sale is the same as selling stock—only the tax treatment is different. Under most equity interest tax rules, only capital gains from a short sale, or from a sale of an “equity interest in common stock,” in a corporation or partnership that has a specified class of share—a “controlled class,” as defined by the IRS—are taxable. Therefore, if Jim sells shares of a control class equity interest in General Electric, the short sale is taxable. But if Jim sells shares of his GE equity interest and GE owns the company, he is exempt from the capital gains tax on the sales.
How does your income from shares change if you acquire a different type of equity interest? That is, if you acquire shares of another type of equity interest that has the same characteristics as a “controlled class” share, you will have to apply the same rules.
For example, assume for simplicity that you are the owner of an ESOP that owns stock that is controlled by a group of people, and you are a member of that group.
How many people fill out Form 1099-LTC each year?
According to the IRS there are 7.2 million people on Form 1099-LTC each year, and the average amount paid is 1,072. However, according to the Census Bureau, there are more Americans than people who file Form 1099-LTC, so there must be something going on.
Did you get a refund on the Form 1099-LTC?
No, some people with an adjusted gross income that is over the standard deduction may not be eligible for the standard deduction and therefore not eligible to file Form 1099-LTC. Also, even if you are eligible for a refund, the amount is smaller than the amount that would be expected based on your standard deduction. To see if you are eligible see Form 5498 or the Revenue Procedure 2010-13 and see if your refund exceeds your Adjusted Gross Income (AGI). The IRS has a handy calculator that can estimate the amount of your refund based on your standard deduction.
What is a Form 1099-K?
In 2015, the new form was updated to be more current with the IRS. In general, a Form 1099-K is used to report wages you receive that are taxable. Form 8485 is the main form used to issue Form 1099-Ks, and it is issued with your paycheck.
Is there a due date for Form 1099-LTC?
I need this information ASAP!
Yes, you must file Form 1099-LTC by June 15, 2012, in order to receive the refund.
I sent a check by mail but don't see any form on my W-9! Can I file online?
Yes, you can file your LTC with us either online, by phone or in person, and get a paper 1099-LTC. The check can also be paid online.
How do I mail in my Form 1099-LTC?
Fill out the W-9 and send it to:
United States Department of Treasury
Payment and Tax Bulletin
PO Box 84908
Baltimore, Maryland 21244
How do I file my income tax refund online with W-9?
Please complete and submit the form:
Online or over the phone, by E-file.
W5-BEN (online tax return).
How do I file my income tax refund electronically with a paper W-9?
If there is a paper W-9 please print and complete the form on a piece of paper and include it with the refund request form.
If you wish to file electronically, please click on the “File Your Tax Refund Online” option on our IRS Help and Contact Us page and proceed to the IRS website. Your request will be transferred to our processing system through the United States Postal Service.
When will I be emailed a receipt for my refund?
When you have completed filing your tax return and received your IRS refund, you will receive an email notification and a Form 1099 by email. In order to receive the 1099 you must include this item with your refund request.
To be sure of receiving your 1099, please check your spam folder and/or your Junk in Mail folder. If you have received your 1099 but do not have any receipt that is in your junk or Junk in Mail folder, please call us at and include your zip code in with your reference number.