Discussion:Buyer's Rebate from Home Purchase
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Discussion Forum Index --> Tax Questions --> Buyer's Rebate from Home Purchase
| 9 April 2007 | |
| I have a client who received a 2006 1099-Misc reporting $2,000 of nonemployee comp. in box 7. In 2006, my client purchased
a home and his realtor gave him $2000 of her commission. The $2,000 was not included on the HUD stmnt. and he didn't provide any services to the realtor. Could the $2K be considered a nontaxable rebate to the buyer? I have read that might be an adjustment to his cost basis and therefore nontaxable. Having received a 1099 for it, how should I report the $2K amount on his 1040? It's not a payment for services so I don't think it's subject to SE taxes either. Thank you in advance for your help!!! | |
| 9 April 2007 | |
| 1099 MISC was issued in error...see if you can get it re-issued...should have been reported as a reduction in purchase price | |
| 6 February 2008 | |
| I have this same issue for a client of mine. She sold the property and received a commisison of 10,000 and gave a rebate of 2,000 to the seller. The agent received a 1099 for the 10K and she issued a 1099 to the seller for 2K.
Since my client needs to show the 10K as income do we just show the deduction of 2K as a reduction to income and not issue the 1099? | |
| 6 February 2008 | |
| She should not issue a 1099 for the rebate she gave the seller. In some states like CA, this is illegal commission sharing and she could lose her license for it. Either she should have reduced the commission she charged, or reduced the price of the house. | |
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