Some examples of sellers who may qualify for this exemption are REO sellers, builders and real estate investors who are not incorporated (i.e. LLC's, partnerships and individuals). This exemption from 1099–S reporting does require a signed certification from the seller.

The certification, once signed can be relied upon for the entire tax year regardless of how many properties the seller sells. Once the seller has signed the certification, settlement agents do not have to keep track of how many deals the seller closes. Settlement agents also do not have to go back and file 1099–S forms if they fail to sell at least 25 properties. Settlement agents have the right to rely on the certification for an entire year. Their only obligation is to properly document their files with the certification.

It is important to note, this exemption does require the certification to identify each property being exempted. Therefore, the seller does sign a master certification only once each tax year. The certification includes instructions authorizing the settlement agent to further document each file which closes.

Settlement agents must ensure the certifications are in each file closed by the taxpayer claiming this exemption. For samples of the 1099–S Escrow Instruction and Certification of Exempt Status refer to escrow technical memorandum #151–2012 entitled "1099–S Proceeds from Real Estate Transactions."