When is a certification required?

A certification is used when the seller claims a tax exclusion or other basis that eliminates the payer's obligation to file an information return; provide it at closing so the closing agent can determine filing needs.

Can this be signed electronically?

Yes. An electronic signature that meets ESIGN and UETA standards is valid; record intent, consent, attribution, and retention to satisfy legal validity requirements.

What if the seller provides incorrect information?

Incorrect TINs or false statements can prompt backup withholding, IRC §6721 penalties, and potential audit; retain supporting documents and correct records promptly if errors are discovered.

Is notarization ever required?

Notarization depends on state and the closing documents involved; the certification itself may not require notarization unless tied to a deed or local rule requiring notarized attestations.

How long should records be kept?

Retain the certification for at least three years per IRS minimums, longer for real estate disputes; HIPAA or state rules may require extended retention.

Who decides whether to file 1099-S?

The payer or closing agent typically determines reporting obligations based on documentation and law; collecting the certification helps document the decision-making process.

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Certification for No Information Reporting on Sale of Principal Residence

Certification for No Information Reporting on Sale of Principal Residence

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

What this certification is and when it applies

The Certification for No Information Reporting on Sale of Principal Residence is a written declaration used when a transferor claims an exclusion from information reporting for the sale of a primary home. It documents the seller's eligibility for the Section 121 exclusion and confirms that the transaction does not require the payer or closing agent to file Form 1099-S with the IRS. The certification helps buyers, closing agents, and title companies determine reporting obligations and preserve documentation that supports the seller's tax position under federal rules.

Why this certification matters to sellers and closing agents

The certification clarifies reporting duties, limits unnecessary 1099-S filings, and provides a contemporaneous record that the seller claims the Section 121 exclusion. Properly completed certifications reduce downstream disputes and help the payer meet IRS information return obligations.

Who typically completes or receives this certification

Common participants include sellers claiming the principal-residence exclusion, closing agents, title companies, and purchasers when they must determine information-reporting obligations.

Sellers claiming exclusion — Sellers who meet ownership and use tests fill and sign the certification to document their claim and provide it to the closing agent.
Title or closing agents — Agents collect the certification to decide whether Form 1099-S must be issued and to keep supporting documentation.
Buyers or real estate attorneys — Parties involved in the closing may retain a copy for tax due-diligence and recordkeeping.

Retain a signed copy with closing files so the transaction record plainly shows why reporting was not required.

Step-by-step: Completing the certification accurately

Follow these steps at or before closing to ensure the certification supports a no-report filing decision and is defensible under IRS rules.

01

Confirm eligibility: Verify seller meets ownership and use tests for Section 121.
02

Complete seller details: Enter full legal name, TIN, address, and property information.
03

State the exclusion claim: Specify the Section 121 exclusion and basis for the claim.
04

Sign and date: Seller signature and date to attest under penalty of perjury.

Key components to include on a professional certification

A well-structured certification contains clear identification, precise statements of tax position, and signature attestations to support a no-report decision.

Identifying data

Seller name, TIN, mailing address, and contact details so the payer can match tax records and TIN verification.

Property details

Complete legal property description or address, parcel number if applicable, and county to accurately identify the transferred asset.

Transaction date

Closing or transfer date in MM/DD/YYYY format to establish the tax year and the timing of the seller's ownership/use tests.

Exclusion reason

A concise statement referencing the Section 121 exclusion or other statutory basis explaining why Form 1099-S is not required.

Signature block

Seller signature, printed name, title if applicable, and signature date; include witness or notary blocks where local rules require them.

Retention note

A line indicating the payer or closing agent will keep the certification with closing records for the applicable retention period.

How to set up a digital workflow for the certification

Configure a standardized eWorkflow to collect certifications, attach supporting documents, and preserve audit trails for compliance and audits.

Field	Configuration
Seller Name	Required text field with auto-populate from closing package
TIN	Masked numeric field, validation hint for nine digits
Signature	eSignature field with timestamp and signer authentication
Attachment	File upload for settlement statement or proof of principal residence

Digital signing and secure storage considerations

Use an eSignature platform that supports ESIGN and UETA compliance, audit trails, and secure record retention for tax documentation.

Authentication: Email or SMS OTP; stronger KBA where required
Audit trail: Timestamps, IP, and action log
Storage: Encrypted at rest and access-controlled

Maintain signed certifications and associated closing documents in an access-controlled repository with versioning and export capability to meet IRS and internal audit needs.

Where to deliver the completed certification

Route the signed certification to the party responsible for information reporting and record retention so it is available if the IRS questions reporting decisions.

Closing agent: Primary recipient to determine 1099-S obligations
Title company: Keeps certification with settlement file
Buyer or lender: Copies provided when required for loan underwriting
Seller: Retains a signed copy for tax records

Timing and typical deadlines to observe

Keep the certification and supporting records from the date of closing; timing affects the tax year and any subsequent reporting or audits.

Provide upon request:

Seller should give certification when the payer or closing agent requests it

1099-S determination:

Decide at or immediately after closing whether Form 1099-S must be filed

Retain with file:

Store certification with closing package for the applicable retention period

IRS audit window:

Maintain records long enough to cover statute limitations and potential IRS review

Tax-year effect:

Closing date determines which tax year the sale is reported or excluded

Penalties and risks if the certification is incorrect

Incorrect 1099 omission: Potential IRC §6721 penalties for missing or incorrect information returns

Late filing penalties: Per-form penalties escalate with delay

Intentional disregard: Higher penalties if the IRS finds intentional disregard

Backup withholding: Missing or incorrect TIN may trigger 24% withholding

Audit exposure: Seller may face IRS audit and additional tax liability

Escrow disputes: Closing parties may dispute responsibility for reporting

Essential data points to capture and protect

Seller name: Exact legal name

Tax ID: SSN or EIN

Property ID: Address or parcel number

Closing date: MM/DD/YYYY

Signature: Signed and dated

Supporting doc: Settlement statement or proof of residence

Practical tips for accurate and efficient completion

Follow a consistent process to reduce errors and ensure the certification supports audit and reporting decisions.

Standardize the form

Use a single template with required fields and validation rules to avoid missing information.

Validate TINs

Run TIN verification where feasible to prevent backup withholding triggers.

Attach supporting proof

Include settlement statement and evidence of primary residence where available.

Preserve audit trails

Keep signed copies and digital audit logs with restricted access for compliance and IRS review.

Typical eSignature vendor pricing and capability snapshot for handling certifications

Common eSignature providers differ by price model and features that impact bulk closings, audit trails, HIPAA support, and enterprise controls. signNow is listed first for comparison consistency.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	Yes, 7-day trial	No	No	Yes, limited	Yes, limited
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Frequently asked questions and answers

Answers address common execution, retention, and reporting concerns for certifications asserting no information reporting is required.

Need help? Contact support

When is a certification required?
A certification is used when the seller claims a tax exclusion or other basis that eliminates the payer's obligation to file an information return; provide it at closing so the closing agent can determine filing needs.
Can this be signed electronically?
Yes. An electronic signature that meets ESIGN and UETA standards is valid; record intent, consent, attribution, and retention to satisfy legal validity requirements.
What if the seller provides incorrect information?
Incorrect TINs or false statements can prompt backup withholding, IRC §6721 penalties, and potential audit; retain supporting documents and correct records promptly if errors are discovered.
Is notarization ever required?
Notarization depends on state and the closing documents involved; the certification itself may not require notarization unless tied to a deed or local rule requiring notarized attestations.
How long should records be kept?
Retain the certification for at least three years per IRS minimums, longer for real estate disputes; HIPAA or state rules may require extended retention.
Who decides whether to file 1099-S?
The payer or closing agent typically determines reporting obligations based on documentation and law; collecting the certification helps document the decision-making process.

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