Internal Revenue Code:Sec. 6045. Returns of brokers
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Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle F - Procedure and Administration
CHAPTER 61 - INFORMATION AND RETURNS
Subchapter A - Returns and Records
PART III - INFORMATION RETURNS
Subpart B - Information Concerning Transactions With Other Persons
Statute
Sec. 6045. Returns of brokers
(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 seller's broker,
(D) the buyer's 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.
Sources
(Aug. 16, 1954, ch. 736, 68A Stat. 747; Pub. L. 94-455, title XIX,
Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 97-248,
title III, Sec. 311(a)(1), Sept. 3, 1982, 96 Stat. 600; Pub. L.
98-369, div. A, title I, Sec. 150(a), title VII, Sec. 714(e)(1),
July 18, 1984, 98 Stat. 690, 961; Pub. L. 99-514, title XV, Sec.
1501(c)(4), 1521(a), Oct. 22, 1986, 100 Stat. 2737, 2746; Pub. L.
100-647, title I, Sec. 1015(e)(1)(A), (2)(A), (3), title IV, Sec.
4005(g)(3), Nov. 10, 1988, 102 Stat. 3569, 3570, 3650; Pub. L.
101-239, title VII, Sec. 7814(c)(1), Dec. 19, 1989, 103 Stat. 2413;
Pub. L. 101-508, title XI, Sec. 11704(a)(25), Nov. 5, 1990, 104
Stat. 1388-519; Pub. L. 102-486, title XIX, Sec. 1939(a), Oct. 24,
1992, 106 Stat. 3034; Pub. L. 104-168, title XII, Sec. 1201(a)(5),
July 30, 1996, 110 Stat. 1469; Pub. L. 104-188, title I, Sec.
1704(o)(1), Aug. 20, 1996, 110 Stat. 1886; Pub. L. 105-34, title
III, Sec. 312(c), title X, Sec. 1021(a), Aug. 5, 1997, 111 Stat.
839, 922.)
Miscellaneous
AMENDMENTS
1997 - Subsec. (e)(5). Pub. L. 105-34, Sec. 312(c), added par.
(5).
Subsec. (f). Pub. L. 105-34, Sec. 1021(a), added subsec. (f).
1996 - Subsec. (b)(1). Pub. L. 104-168 substituted ''name,
address, and phone number of the information contact'' for ''name
and address''.
Subsec. (e)(3). Pub. L. 104-188 inserted at end ''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.''
1992 - Subsec. (e)(4). Pub. L. 102-486 substituted heading for
one which read: ''Whether seller's financing was
federally-subsidized'' and amended text generally. Prior to
amendment, text read as follows: ''In the case of a real estate
transaction involving a residence, the real estate reporting person
shall specify on the return under subsection (a) and the statement
under subsection (b) whether or not the financing (if any) of the
seller was federally-subsidized indebtedness (as defined in section
143(m)(3)).''
1990 - Subsec. (e)(4). Pub. L. 101-508 substituted ''reporting
person'' for ''broker''.
1989 - Subsec. (e)(3), (4). Pub. L. 101-239 redesignated par.
(3), relating to whether seller's financing was
federally-subsidized indebtedness, as (4).
1988 - Subsec. (c)(1). Pub. L. 100-647, Sec. 1015(e)(1)(A),
inserted at end ''A person shall not be treated as a broker with
respect to activities consisting of managing a farm on behalf of
another person.''
Subsec. (e)(1). Pub. L. 100-647, Sec. 1015(e)(3)(A), substituted
''real estate reporting person'' for ''real estate broker''.
Subsec. (e)(2). Pub. L. 100-647, Sec. 1015(e)(3), substituted
''estate reporting person'' for ''estate broker'' in par. (2)
heading and two places in text.
Subsec. (e)(3). Pub. L. 100-647, Sec. 4005(g)(3), added par. (3)
relating to whether seller's financing was federally-subsidized
indebtedness.
Pub. L. 100-647, Sec. 1015(e)(2)(A), added par. (3) relating to
prohibition of separate charge for filing return.
1986 - Subsec. (b). Pub. L. 99-514, Sec. 1501(c)(4), in amending
subsec. (c) generally, substituted references to persons required
to make a return for former references to persons making a return.
Subsec. (e). Pub. L. 99-514, Sec. 1521(a), added subsec. (e).
1984 - Subsec. (c)(4). Pub. L. 98-369, Sec. 714(e)(1), added par.
(4).
Subsec. (d). Pub. L. 98-369, Sec. 150(a), added subsec. (d).
1982 - Pub. L. 97-248 designated existing provisions as subsec.
(a), substituted ''the name and address of each customer, with such
details regarding gross proceeds'' for ''the names of customers for
whom such person has transacted any business, with such details
regarding the profits and losses'' after ''may prescribe, showing''
and ''such business'' for ''each customer as will enable the
Secretary to determine the amount of such profits and losses''
after ''with respect to'', and added subsecs. (b) and (c).
1976 - Pub. L. 94-455 struck out ''or his delegate'' after
''Secretary'' wherever appearing.
EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by section 312(c) of Pub. L. 105-34 applicable to sales
and exchanges after May 6, 1997, with certain exceptions, see
section 312(d) of Pub. L. 105-34, set out as a note under section
121 of this title.
Section 1021(c) of Pub. L. 105-34 provided that: ''The amendment
made by this section (amending this section) shall apply to
payments made after December 31, 1997.''
EFFECTIVE DATE OF 1996 AMENDMENTS
Section 1704(o)(2) of Pub. L. 104-188 provided that: ''The
amendment made by paragraph (1) (amending this section) shall take
effect as if included in section 1015(e)(2)(A) of the Technical and
Miscellaneous Revenue Act of 1988 (Pub. L. 100-647).''
Amendment by Pub. L. 104-168 applicable to statements required to
be furnished after Dec. 31, 1996 (determined without regard to any
extension), see section 1201(b) of Pub. L. 104-168, set out as a
note under section 6041 of this title.
EFFECTIVE DATE OF 1992 AMENDMENT
Section 1939(b) of Pub. L. 102-486 provided that: ''The amendment
made by subsection (a) (amending this section) shall apply to
transactions after December 31, 1992.''
EFFECTIVE DATE OF 1989 AMENDMENT
Amendment by Pub. L. 101-239 effective, except as otherwise
provided, as if included in the provision of the Technical and
Miscellaneous Revenue Act of 1988, Pub. L. 100-647, to which such
amendment relates, see section 7817 of Pub. L. 101-239, set out as
a note under section 1 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Section 1015(e)(1)(B) of Pub. L. 100-647 provided that: ''The
amendment made by subparagraph (A) (amending this section) shall
take effect as if included in the amendments made by section
311(a)(1) of the Tax Equity and Fiscal Responsibility Act of 1982
(Pub. L. 97-248).''
Section 1015(e)(2)(B) of Pub. L. 100-647 provided that: ''The
amendment made by subparagraph (A) (amending this section) shall
take effect on the date of the enactment of this Act (Nov. 10,
1988).''
Amendment by section 1015(e)(3) of Pub. L. 100-647 effective,
except as otherwise provided, as if included in the provision of
the Tax Reform Act of 1986, Pub. L. 99-514, to which such amendment
relates, see section 1019(a) of Pub. L. 100-647, set out as a note
under section 1 of this title.
Amendment by section 4005(g)(3) of Pub. L. 100-647 applicable to
financing provided, and mortgage credit certificates issued, after
Dec. 31, 1990, with certain exceptions, see section 4005(h)(3) of
Pub. L. 100-647, set out as a note under section 143 of this title.
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by section 1501(c)(4) of Pub. L. 99-514 applicable to
returns the due date for which (determined without regard to
extensions) is after Dec. 31, 1986, see section 1501(e) of Pub. L.
99-514, set out as an Effective Date note under section 6721 of
this title.
Section 1521(c) of Pub. L. 99-514 provided that: ''The amendments
made by this section (amending this section and section 3406 of
this title) shall apply to real estate transactions closing after
December 31, 1986.''
EFFECTIVE DATE OF 1984 AMENDMENT
Section 150(b) of Pub. L. 98-369 provided that: ''The amendment
made by this section (amending this section) shall apply to
payments received after December 31, 1984.''
Amendment by section 714(e)(1) of Pub. L. 98-369 effective as if
included in the provision of the Tax Equity and Fiscal
Responsibility Act of 1982, Pub. L. 97-248, to which such amendment
relates, see section 715 of Pub. L. 98-369, set out as a note under
section 31 of this title.
EFFECTIVE DATE OF 1982 AMENDMENT
Section 311(c)(1) of Pub. L. 97-248, as amended by Pub. L.
99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''The
amendments made by subsection (a) (amending this section and
section 6678 of this title) shall take effect on the date of the
enactment of this Act (Sept. 3, 1982), except that -
''(A) regulations relating to reporting by commodities and
securities brokers shall be issued under section 6045 of the
Internal Revenue Code of 1986 (formerly I.R.C. 1954) (as amended
by this Act) within 6 months after the date of the enactment of
this Act (Sept. 3, 1982), and
''(B) such regulations shall not apply to transactions
occurring before January 1, 1983.''
NO PENALTY FOR PAYMENTS BEFORE JANUARY 1, 1985
Section 714(e)(2) of Pub. L. 98-369, as amended by Pub. L.
99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''No
penalty shall be imposed under the Internal Revenue Code of 1986
(formerly I.R.C. 1954) with respect to any person required (by
reason of the amendment made by paragraph (1) (amending this
section)) to file a return under section 6045 of such Code with
respect to any payment before January 1, 1985.''
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 1400C, 3406, 6041, 6049,
6721, 6722, 6724, 7603 of this title.
