BUYERS MUST REPORT REAL ESTATE PURCHASES FROM NONRESIDENT SELLERS

Did you know that if you buy North Carolina real estate owned by a resident of another state or country, you must report the sale to the North Carolina Department of Revenue?

Under rules recently adopted by the N.C. Department of Revenue, persons (individuals, fiduciaries, partnerships, corporations, etc.) who purchase North Carolina real estate from nonresidents after January 1, 1992, must complete and file with the Department of Revenue (within 15 days after the closing of the sale) Form NC-1099 NRS giving the seller's name, address and social security (or federal identification) number; the location of the property; the date of closing; and the gross sales price of the real property and any associated personal property. The buyer also must furnish the seller a copy of the completed form.

The purpose of this new rule is to assure that nonresident sellers file an income tax return reporting any gain that they may have realized from the sale of property located in North Carolina. For forms and information, contact any office of the N.C. Department of Revenue or call the Department toll-free at 1-800-222-9965.

CAVEAT

Anytime you as a real estate agent are involved in the sale of North Carolina property which is owned by a nonresident, you should inform the buyer, seller and settlement officer of this new reporting requirement, and you should make every effort to assure that they are in compliance.