Discussion:Purchase of an Agency-split commissions
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Discussion Forum Index --> Tax Questions --> Purchase of an Agency-split commissions
Mark Eason (talk|edits) said: | 6 February 2007 |
| An insurance agent who owns his own agency agrees to purchase another agency. He will split commissions over x years with old agent. No other items involved.
Are commissions paid (split) to old agent an expense or are they the purchase price of the agency which will be subject to section 197 amortization? Thanks for the help. | |
| 6 February 2007 | |
| Seems like you don't know what the expense will be until there is income. | |
| 6 February 2007 | |
| I've been involved in commission splits and always get a 1099-Misc from the primary broker for the exact amount of commissions I was due. I am assuming the broker claims amount he pays me on his Schedule C. | |
Mark Eason (talk|edits) said: | 7 February 2007 |
| Insurance company has sent 1099 that includes old agents amount presale, and both agents amounts after sale. I will report full 1099 and then back out presale amount. The question is how to handle old agents post sale commissions (split).
Kevin-yes you are correct. | |
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