Selling your home with an ITIN — Form 1099-S and the exclusion

Selling a home with an ITIN works almost exactly like selling with a Social Security number. The Section 121 exclusion — up to $250,000 of gain tax-free, or $500,000 on a joint return — depends on how long you owned and lived in the home, not on what kind of taxpayer identification number you file with. Two things do change when the seller has an ITIN: the closing agent will ask questions to determine whether federal FIRPTA withholding applies, and the Form 1099-S the closing agent issues will be matched against your ITIN, so the sale usually has to appear on your tax return. This page covers both, plus state withholding and the basis records that determine how much gain you actually have.

The $250,000/$500,000 exclusion applies to ITIN filers

Section 121 lets you exclude up to $250,000 of gain from the sale of your main home — up to $500,000 if you file a joint return with your spouse. To qualify, you must meet two tests, both measured against the five years ending on the date of sale:

  • Ownership test: you owned the home for at least 24 months (2 years) out of the last 5 years.
  • Use test: you used it as your residence for at least 24 months (2 years) of those same 5 years.

The two 24-month periods do not have to be the same months — for example, you can satisfy the use test as a renter before you bought the home — but both must fall within the five-year window. There is also a look-back rule: you are not eligible if you already excluded gain from the sale of another home during the two years before this sale.

Nothing in these tests asks about immigration status or the type of TIN on your return. A resident alien who files Form 1040 with an ITIN and meets the ownership and use tests claims the same exclusion as any other filer. (Nonresident sellers face a separate issue — FIRPTA withholding — covered below.)

Form 1099-S: who sends it and what it forces you to do

Form 1099-S, Proceeds From Real Estate Transactions, is filed by the person responsible for closing the transaction — normally the settlement agent listed on the Closing Disclosure. If no settlement agent is listed, responsibility falls down a hierarchy: the buyer’s attorney, the seller’s attorney, the title or escrow company that disburses the proceeds, then the mortgage lender. The form reports the gross proceeds, the closing date, and the property address, and a copy goes to the IRS under your ITIN.

There is an important exception. The closing agent does not have to issue a 1099-S on the sale of a principal residence if you sign a written certification stating that the full gain is excludable under Section 121, the sale price is $250,000 or less ($500,000 or less for married sellers), and there has been no period of nonqualified use after December 31, 2008. Closing agents typically present this certification at settlement — read it carefully and only sign it if every assurance is true for you.

The reporting rule on your return follows directly from this: you must report the sale on Form 8949 and Schedule D if you received a Form 1099-S or if you cannot exclude all of your gain. If you signed the certification, received no 1099-S, and your entire gain is excludable, the sale does not have to appear on your return at all.

FIRPTA: the resident-vs-nonresident hinge

FIRPTA is where ITIN sellers need precision. Federal law requires the buyer to withhold 15% of the amount realized (generally the sales price) when purchasing US real property from a “foreign person.” The buyer is the withholding agent and remains liable if withholding was required and skipped, so closing agents take this seriously.

The hinge is the definition. A foreign person is a nonresident alien individual (or foreign corporation, partnership, trust, or estate). Per the IRS, the definition “does not include a resident alien individual.” Whether you are a resident alien for tax purposes turns on the green card test or the substantial presence test — not on having an SSN. An ITIN holder who meets the substantial presence test is a resident alien and is not subject to FIRPTA withholding. An ITIN holder who is a nonresident alien is a foreign person, and the 15% applies.

How the closing agent sorts this out: a resident seller gives the buyer a certification of non-foreign status — a statement, signed under penalties of perjury, with the seller’s name, US taxpayer identification number, and home address. An ITIN is a US taxpayer identification number for this purpose, which is one practical reason to confirm your ITIN is active before closing — see renewing your ITIN, and if you have never had one, start at how to apply for an ITIN. The buyer may rely on the certification unless the buyer has actual knowledge, or receives notice from an agent, that it is false.

If you are a nonresident seller, withholding may still be reduced or avoided: no withholding is required if the buyer acquires the property as a residence and the amount realized is $300,000 or less (with the buyer planning to live there at least 50% of the days the property is used during each of the first two 12-month periods after transfer), and a reduced 10% rate applies to buyer-residence sales between $300,000 and $1 million. The withheld amount is remitted with Form 8288, and Form 8288-A documents the withholding in your name.

State withholding: the California example

Some states run their own real-estate withholding alongside FIRPTA. In California, the real estate escrow person withholds 3 1/3% of the total sales price (or an elective alternative computed on the gain) unless the seller certifies an exemption on Form 593 before the close of escrow. The most common exemption: the property was last used as the seller’s principal residence within the meaning of IRC Section 121 — and for the California exemption, without regard to the two-year time period. A home last used as a rental, vacation home, or second home does not qualify. If you are selling in another state, ask the closing agent early whether a state withholding form applies — see your state tax guide.

Keep your basis records — they decide whether you owe anything

Your gain is the sales price minus your adjusted basis, and basis is generally what you paid for the home — including cash, debt, and purchase expenses — increased by the cost of improvements that add to its value (a new roof, an addition, a remodeled kitchen). Every dollar of documented basis is a dollar less of gain measured against the $250,000/$500,000 cap. Keep closing statements from the purchase, receipts and contracts for improvements, and records of any prior depreciation if you ever rented part of the home (rental reporting rules). If you receive an IRS notice after the sale, identify it before responding — see our IRS notice code guide.

Last verified: 2026-06-11. Sources: IRS Topic 701 — sale of your home, IRS — Form 1099-S instructions, IRS — FIRPTA withholding, IRS — FIRPTA definitions.

General information — not tax advice. Real-estate closings move fast and FIRPTA mistakes are expensive; involve an Enrolled Agent or CPA before closing if your residency status is unclear.