Question & Answers

Is commission rebate from the buyer's Realtor to the buyer a taxable income? Transaction was done outside of the escrow and 1099-Misc (Box 7) was issued to the buyer following January. 1) is this taxable income for the buyer and 2) if so, is he responsible for SE taxes as well?

File Your Taxes Online
1 Vote
Jun 18, 2012 by File Your Taxes Online
Category: Tax Planning

KR Hoffman & Co
0 Votes
KR Hoffman & Co
Jun 23, 2012  
it is not income, not taxable and the 1099 should not have been issued.

The IRS determined in Ltr. Rul. 200721013 that certain commissions received by real estate brokers that were passed along to their home-buying clients were neither reportable payments to the brokers nor gross income to the clients.