(a) General rule
Every person doing business as a broker shall, when required by the Secretary, make a return, in accordance with such regulations as the Secretary may prescribe, showing the name and address of each customer, with such details regarding gross proceeds and such other information as the Secretary may by forms or regulations require with respect to such business.
(b) Statements to be furnished to customers Every person required to make a return under subsection (a) shall furnish to each customer whose name is required to be set forth in such return a written statement showing
(1) the name, address, and phone number of the information contact of the person required to make such return, and
(2) the information required to be shown on such return with respect to such customer.
The written statement required under the preceding sentence shall be furnished to the customer on or before January 31 of the year following the calendar year for which the return under subsection (a) was required to be made.
(c) Definitions For purposes of this section
(1) Broker The term broker includes
(A) a dealer,
(B) a barter exchange, and
(C) any other person who (for a consideration) regularly acts as a middleman with respect to property or services.
A person shall not be treated as a broker with respect to activities consisting of managing a farm on behalf of another person.
(2) Customer
The term customer means any person for whom the broker has transacted any business.
(3) Barter exchange
The term barter exchange means any organization of members providing property or services who jointly contract to trade or barter such property or services.
(4) Person
The term person includes any governmental unit and any agency or instrumentality thereof.
(d) Statements required in case of certain substitute payments If any broker
(1) transfers securities of a customer for use in a short sale or similar transaction, and
(2) receives (on behalf of the customer) a payment in lieu of
(A) a dividend,
(B) tax-exempt interest, or
(C) such other items as the Secretary may prescribe by regulations,
during the period such short sale or similar transaction is open, the broker shall furnish such customer a written statement (at such time and in the manner as the Secretary shall prescribe by regulations) identifying such payment as being in lieu of the dividend, tax-exempt interest, or such other item. The Secretary may prescribe regulations which require the broker to make a return which includes the information contained in such written statement.
(e) Return required in the case of real estate transactions
(1) In general
In the case of a real estate transaction, the real estate reporting person shall file a return under subsection (a) and a statement under subsection (b) with respect to such transaction.
(2) Real estate reporting person For purposes of this subsection, the term real estate reporting person means any of the following persons involved in a real estate transaction in the following order:
(A) the person (including any attorney or title company) responsible for closing the transaction,
(B) the mortgage lender,
(C) the sellers broker,
(D) the buyers broker, or
(E) such other person designated in regulations prescribed by the Secretary.
Any person treated as a real estate reporting person under the preceding sentence shall be treated as a broker for purposes of subsection (c)(1).
(3) Prohibition of separate charge for filing return
It shall be unlawful for any real estate reporting person to separately charge any customer for complying with any requirement of paragraph (1). Nothing in this paragraph shall be construed to prohibit the real estate reporting person from taking into account its cost of complying with such requirement in establishing its charge (other than a separate charge for complying with such requirement) to any customer for performing services in the case of a real estate transaction.
(4) Additional information required In the case of a real estate transaction involving a residence, the real estate reporting person shall include the following information on the return under subsection (a) and on the statement under subsection (b):
(A) The portion of any real property tax which is treated as a tax imposed on the purchaser by reason of section
164 (d)(1)(B).
(B) Whether or not the financing (if any) of the seller was federally-subsidized indebtedness (as defined in section
143 (m)(3)).
(5) Exception for sales or exchanges of certain principal residences
(A) In general Paragraph (1) shall not apply to any sale or exchange of a residence for $250,000 or less if the person referred to in paragraph (2) receives written assurance in a form acceptable to the Secretary from the seller that
(i) such residence is the principal residence (within the meaning of section
121) of the seller,
(ii) if the Secretary requires the inclusion on the return under subsection (a) of information as to whether there is federally subsidized mortgage financing assistance with respect to the mortgage on residences, that there is no such assistance with respect to the mortgage on such residence, and
(iii) the full amount of the gain on such sale or exchange is excludable from gross income under section
121.
If such assurance includes an assurance that the seller is married, the preceding sentence shall be applied by substituting $500,000 for $250,000. The Secretary may by regulation increase the dollar amounts under this subparagraph if the Secretary determines that such an increase will not materially reduce revenues to the Treasury.
(B) Seller
For purposes of this paragraph, the term seller includes the person relinquishing the residence in an exchange.
(f) Return required in the case of payments to attorneys
(1) In general
Any person engaged in a trade or business and making a payment (in the course of such trade or business) to which this subsection applies shall file a return under subsection (a) and a statement under subsection (b) with respect to such payment.
(2) Application of subsection
(A) In general
This subsection shall apply to any payment to an attorney in connection with legal services (whether or not such services are performed for the payor).
(B) Exception This subsection shall not apply to the portion of any payment which is required to be reported under section
6041 (a) (or would be so required but for the dollar limitation contained therein) or section
6051.
