What Is an ALTA Statement and How Does It Work?

An ALTA statement is an itemized settlement ledger, created using a template from the American Land Title Association, that lists every fee, credit, and payment moving through a real estate closing. It works as a detailed companion to the federal Closing Disclosure, capturing line items that the Closing Disclosure’s rigid format does not always show. The settlement agent prepares it, both parties review it, and both sign it at the closing table.

What the Statement Shows

The statement is organized into debit and credit columns. Debits are amounts owed; credits are amounts received or already paid. Reading top to bottom, you will typically see:

The gross sales price and any earnest money already deposited by the buyer
Loan amounts coming from the lender
Prorated items such as property taxes, homeowners association dues, and prepaid utilities, split between buyer and seller based on the closing date
Title insurance premiums, broken out separately for the lender’s policy and the owner’s policy
Recording fees for the deed and mortgage, transfer or stamp taxes, and any survey or inspection charges¹
Real estate commissions, with the buyer’s brokerage and the seller’s brokerage shown individually²

When you buy an owner’s policy and a lender’s policy at the same closing, watch for a simultaneous-issue discount. Because the title company runs only one search for both policies, some insurers reduce the price of one of them, and borrowers who don’t know about the discount can end up paying full price for each.³

Which Version You’ll See

ALTA publishes four versions of the statement, and which one you receive depends on your role and how the deal is financed:¹

Borrower-Buyer, focused on the buyer’s acquisition costs, including loan charges, prepaid items, and amounts due at closing
Seller, detailing the seller’s side, showing proceeds after subtracting existing liens, commissions, and other payoff amounts
Combined, showing both sides on one document
Cash, used for transactions without mortgage financing, with lender-related charges stripped out

These templates can be adjusted for local customs, so a settlement agent may add line items for regional fees or assessments that would not appear on a standardized federal form.²

How It Differs From the Closing Disclosure

Since 2015, the Closing Disclosure has been the mandatory federal settlement form under the TILA-RESPA Integrated Disclosure rules. The ALTA statement is not federally required. It’s used because it offers more room to track transaction-specific costs.

The Closing Disclosure focuses on loan terms, interest rates, and federal regulatory compliance. Its format is set by the Consumer Financial Protection Bureau and leaves little room for line items unique to a locality or a deal. The ALTA statement fills that gap by itemizing things like exact commission splits between agents, wire transfer charges, and small administrative fees that may not appear on the Closing Disclosure at all.²

The same person often prepares both documents. Federal regulations authorize the settlement agent to prepare the Closing Disclosure on behalf of the lender, and the Closing Disclosure form itself requires the settlement agent’s name.⁴ Because one person typically produces both, the two should line up. Any discrepancy is worth raising before you sign.

What to Check Before You Sign

Federal rules require your lender to make sure you receive the Closing Disclosure at least three business days before closing.⁵ No parallel federal rule sets a deadline for the ALTA statement, but many settlement agents deliver it around the same time. Use that window to put the two documents side by side.

Focus your review on a few places where errors and surprises tend to show up:

Prorated items like property taxes and prepaid insurance. These are calculated to the exact closing date and shift if the date moves.
Title insurance premiums. Confirm the simultaneous-issue discount if both policies are being bought at closing.
The commission section. Following the 2024 industry changes, listing agents can no longer make blanket offers of buyer-agent compensation through the Multiple Listing Service, and buyers are generally required to sign a written agreement with their agent spelling out compensation before touring homes. Confirm that the amounts on the statement match the agreement you signed.⁶
Any figure that appears on one document but not the other, or that differs between them.

You can sign with a pen or through a secure digital platform. Federal law provides that a contract or record cannot be denied enforceability solely because it was signed electronically.⁷ Once everyone signs, the settlement agent disburses funds: wiring proceeds to the seller, paying off existing liens, distributing commissions, and sending recording fees to the local government office. If an error is caught before disbursement, the agent corrects the statement and each party initials the change.

Why the Statement Matters After Closing

The statement doesn’t stop being useful once the deal closes. Several line items on it directly affect your taxes, both in the year of purchase and when you eventually sell.

Costs That Increase Your Home’s Tax Basis

Your cost basis is the starting figure used to calculate taxable gain when you sell. The IRS lets you add certain settlement charges to your basis, including owner’s title insurance premiums, recording fees, transfer or stamp taxes, legal fees for the title search and deed preparation, survey fees, and abstract of title fees. Amounts placed into escrow for future payment of taxes or insurance do not count toward your basis.⁸ Each of these items appears as a line on your ALTA statement, which is why you need to keep the document.

Property Tax Prorations

The statement shows how property taxes are split between buyer and seller based on the closing date. The IRS treats the seller as having paid taxes through the day before the sale, and the buyer as paying from the sale date forward. If you itemize, you can deduct your share of those taxes in the year of the sale.⁹

Form 1099-S Reporting

The settlement agent named on your closing documents is generally the person responsible for filing Form 1099-S with the IRS to report the sale proceeds. The gross proceeds reported come from the contract sales price shown on the settlement documents, without subtracting commissions or other seller expenses.¹⁰ If you sold your primary residence and the gain falls within the federal exclusion — up to $250,000 for a single filer or $500,000 for a married couple filing jointly — you may qualify for an exception to reporting by providing a written certification to the settlement agent.

How Long to Keep It

The IRS advises keeping all records related to property, including your settlement statement, for as long as you own the home, and then for the period of limitations that applies to the tax year in which you sell.¹¹ The general limitations period is three years from the date you file the return reporting the sale, longer if income is substantially underreported. Three years after selling is the floor. Many tax advisors keep it longer because the basis calculation depends on costs documented at original purchase.

Escrow Adjustments That May Follow

Even after you sign, your escrow account can prompt adjustments. Servicers are required to analyze escrow accounts periodically. If the analysis shows a surplus of $50 or more, the servicer must refund it within 30 days. If it shows a shortage, the servicer can either ask you to pay the difference within 30 days or spread repayment over at least 12 monthly installments.¹² These adjustments usually happen because the estimated taxes or insurance premiums used to set up your escrow at closing turned out to differ from the actual bills. Your ALTA statement shows those initial escrow figures, which makes it a useful reference when your payment changes.

1
American Land Title Association. ALTA Settlement Statements
2
American Land Title Association. How to Use ALTA’s Settlement Statements
3
U.S. Department of the Treasury. Exploring Title Insurance, Consumer Protection, and Opportunities for Potential Reforms
4
Consumer Financial Protection Bureau. 12 CFR 1026.38 – Content of Disclosures for Certain Mortgage Transactions
5
eCFR. 12 CFR 1026.19 – Certain Mortgage and Variable-Rate Transactions
6
National Association of Realtors. Summary of 2024 MLS Changes
7
Office of the Law Revision Counsel. 15 U.S.C. Chapter 96 – Electronic Signatures in Global and National Commerce
8
Internal Revenue Service. Publication 523, Selling Your Home
9
Internal Revenue Service. Publication 530, Tax Information for Homeowners
10
Internal Revenue Service. Instructions for Form 1099-S Proceeds From Real Estate Transactions
11
Internal Revenue Service. Topic No. 305, Recordkeeping
12
Consumer Financial Protection Bureau. 12 CFR 1024.17 – Escrow Accounts