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Are NYC Buyer Broker Commission Rebates Taxable? FAQ on IRS Tax and 1099 for Commission Rebates

2017-01-16 6 Dailymotion

Are New York City Buyer Broker Commission Rebates Taxable? http://www.hauseit.com/are-buyer-broker-commission-rebates-taxable-in-nyc/

No. Buyer broker commission rebates are not generally considered to be taxable income. In a private letter to a national brokerage released in 2007, the IRS ruled that a buyer broker commission rebate made through a payment or credit at closing is not includible in a purchaser’s gross income but rather represents an adjustment to the purchase price of the home.

Request a NYC Buyer Broker Commission Rebate: http://www.hauseit.com/nyc-broker-commission-rebate/

Does my buyer’s agent need to send me a 1099 IRS form in connection with the buyer broker commission rebate I am receiving?

No. The IRS ruled that the broker does not have a 1099 IRS reporting obligation in conjunction with a commission rebate. This is because “a payment or credit at closing represents an adjustment to the purchase price of the home and generally is not included in a purchaser’s gross income.”

Legality of NYC Buyer Agent Commission Rebate: http://www.hauseit.com/nyc-broker-commission-rebates-legal/

How is my property’s cost basis affected by my broker commission rebate?

Buyer broker commission rebates result in a reduction of your cost basis. For example, if you purchase a NYC co-op for $1,500,000 and receive a $15,000 buyer broker commission rebate, the rebate would reduce your purchase price in the eyes of the IRS from $1,500,000 to $1,485,000.

It’s important to note that because a taxpayer can only petition the IRS on its own behalf, the ruling above only directly applies to the company which made the petition. However, the language of the IRS ruling makes it clear that any payment or credit at closing represents an “adjustment to the purchase price of the home and generally is not included in a purchaser’s gross income.”

In conclusion, NYC buyer broker commission rebates are not generally considered to be taxable, reportable income.

Visit http://www.hauseit.com/nyc-broker-commission-rebate/ to request your NYC buyer broker commission rebate today.