Comments on: Do I have to pay self employment tax on the rebate my Realtor gave me back from my home purchase? http://24hourmortgageinfo.com/home-purchase/do-i-have-to-pay-self-employment-tax-on-the-rebate-my-realtor-gave-me-back-from-my-home-purchase Mortgage Information When You Need It 24 Hours A Day Sat, 29 Nov 2008 14:54:59 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Judy http://24hourmortgageinfo.com/home-purchase/do-i-have-to-pay-self-employment-tax-on-the-rebate-my-realtor-gave-me-back-from-my-home-purchase/comment-page-1#comment-1489 Judy Wed, 28 Mar 2007 19:57:28 +0000 http://24hourmortgageinfo.com/home-purchase/do-i-have-to-pay-self-employment-tax-on-the-rebate-my-realtor-gave-me-back-from-my-home-purchase#comment-1489 The person who told you that you had to pay self-employment taxes on this is wrong. The tax person who said it's just a way of the Realtor discounting his fees and that you don't have to pay self-employment tax on it is correct. You got a 1099 on this? A 1099 -misc that shows a number as non-employee compensation does trigger self-employment tax, but if you got that, it's not correct and you need to tell the realtor to get it corrected. Actually, since it was just a rebate of fees, I don't know why they would have issued a 1099 of any type - they shouldn't have.<br><b>References : </b><br> The person who told you that you had to pay self-employment taxes on this is wrong. The tax person who said it's just a way of the Realtor discounting his fees and that you don't have to pay self-employment tax on it is correct.

You got a 1099 on this? A 1099 -misc that shows a number as non-employee compensation does trigger self-employment tax, but if you got that, it's not correct and you need to tell the realtor to get it corrected. Actually, since it was just a rebate of fees, I don't know why they would have issued a 1099 of any type – they shouldn't have.
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]]> By: exirsman http://24hourmortgageinfo.com/home-purchase/do-i-have-to-pay-self-employment-tax-on-the-rebate-my-realtor-gave-me-back-from-my-home-purchase/comment-page-1#comment-1488 exirsman Wed, 28 Mar 2007 19:12:28 +0000 http://24hourmortgageinfo.com/home-purchase/do-i-have-to-pay-self-employment-tax-on-the-rebate-my-realtor-gave-me-back-from-my-home-purchase#comment-1488 In my opinion, it is similar to a "return of capital" type transaction and is not taxable. You merely paid less for the service of the Realtor. However, if the Realtor issued you a 1099, IRS may contact you if it is not included on the return. It is absolutely not subject to self-employment tax if you did nothing to "earn" it and are not in the real estate business. Your Realtor should not have issued the 1099 in my view. If they did send one, it certainly should not be as Non-Employee Compensation, but as Other Income. Without viewing the primary documents and any written agreements you had with the Realtor, I cannot advise you on how to treat the income. If it were I, and it was merely a "rebate" of fees, I would file the 1040 and attach a statement regarding the 1099 but not include it in income. See a good E.A. or C.P.A.<br><b>References : </b><br>Enrolled Agent, Accredited Tax Advisor In my opinion, it is similar to a "return of capital" type transaction and is not taxable. You merely paid less for the service of the Realtor. However, if the Realtor issued you a 1099, IRS may contact you if it is not included on the return. It is absolutely not subject to self-employment tax if you did nothing to "earn" it and are not in the real estate business. Your Realtor should not have issued the 1099 in my view. If they did send one, it certainly should not be as Non-Employee Compensation, but as Other Income. Without viewing the primary documents and any written agreements you had with the Realtor, I cannot advise you on how to treat the income. If it were I, and it was merely a "rebate" of fees, I would file the 1040 and attach a statement regarding the 1099 but not include it in income.

See a good E.A. or C.P.A.
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Enrolled Agent, Accredited Tax Advisor

]]> By: bostonianinmo http://24hourmortgageinfo.com/home-purchase/do-i-have-to-pay-self-employment-tax-on-the-rebate-my-realtor-gave-me-back-from-my-home-purchase/comment-page-1#comment-1487 bostonianinmo Wed, 28 Mar 2007 19:07:18 +0000 http://24hourmortgageinfo.com/home-purchase/do-i-have-to-pay-self-employment-tax-on-the-rebate-my-realtor-gave-me-back-from-my-home-purchase#comment-1487 Rebates are just a reduction in the cost of the item purchased. They have no tax consequences on non-deductible purchases. It will lower your cost basis, but that's it. No 1099 should be issued.<br><b>References : </b><br> Rebates are just a reduction in the cost of the item purchased. They have no tax consequences on non-deductible purchases. It will lower your cost basis, but that's it. No 1099 should be issued.
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]]> By: Wayne Z http://24hourmortgageinfo.com/home-purchase/do-i-have-to-pay-self-employment-tax-on-the-rebate-my-realtor-gave-me-back-from-my-home-purchase/comment-page-1#comment-1486 Wayne Z Wed, 28 Mar 2007 18:54:56 +0000 http://24hourmortgageinfo.com/home-purchase/do-i-have-to-pay-self-employment-tax-on-the-rebate-my-realtor-gave-me-back-from-my-home-purchase#comment-1486 I would say that it wouldn't be taxable at all. When you purchase a house, all other costs associated with buying the house are added to the cost (basis) of the house. This rebate would be a reduction in basis, not taxable income. If possible, include it on line 21 of the 1040 and then back it out again on line 21 with an explantion.<br><b>References : </b><br> I would say that it wouldn't be taxable at all. When you purchase a house, all other costs associated with buying the house are added to the cost (basis) of the house.

This rebate would be a reduction in basis, not taxable income. If possible, include it on line 21 of the 1040 and then back it out again on line 21 with an explantion.
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