Received 1099 MISC for Home buying cash rebate & tax treatment


D

dhingra.kk

Hello Folks,

we bought our new home thru a real estate agent and he gave us some
cash back (via check) as rebate from his commision which he received
from the builder. Now he has issued a 1099 MISC with box 7 with that
amount. I showed him the relevant laws that box 7 can only be filled
where he has received some services etc in his trade from me but since
I have not provided any services to him and nor I am an employee to him
/ or self employed, this should not be considered as an income to me,
this should be calculated towards reducing my cost/basis of my house.
But he is not agrred with me on this. Please let me know if I am wronge
and how to correct / cancel this 1099 Misc and treat this on my tax
return . I will really appreciate your feedback on this.

Thanks & regards,
Kaven
 
Ad

Advertisements

D

dhingra.kk

Thanks Gary for your response. Actually, I did not pay him anything, he
received his commission from the builder in his real estate firms's
name like Remax etc, it's also mentioned on my settlement sheet, then,
he got that money from his firm to his personal a/c and then he wrote
me a check from his personal a/c. I have the copies of settlement sheet
and copy of check but no other document since we had only a verbal
agreement. I contacted IRS for that they told me that they are going to
issue a correction notice to the issuer and me also to correct this. I
am waiting for that letter. But from IRS's stand, they atleast got my
one point that since I am not self employed they mentioned that box 7
should not be filled on the 1099 but they did not give me the
taxablility of this payment.

Thanks,
K
 
B

bbs

No problem. Actually that makes it sound even more like a gift.
Whether you did or did not pay the real estate guy probably doesn't
matter, as someone paid him for his services and it sounds like he made
a gratuitous transfer to you. If that is the case we are talking gift
taxes, not income taxes. I am interested in what others think.
Perhaps you could submit the question over at our website and see what
our advisors think.


Best of luck,


Gary Brolis
http://www.MechanicsofMoney.com
http://www.MechanicsofMoney.com/blog.php
 
Ad

Advertisements

D

dhingra.kk

Thanks again Gary, Yes, it's more like of a personal payment for which
1099 Misc should not be used at all.
I also submitted this question on your site as well.

Thanks & regards,

K
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top