"Harlan Lunsford" <hlunsford[at]bellsouth.net> wrote:
- quote -

The money that you got is a credit which is basically a
reduction in price and not income.

- quote -

Since you mentioned that he was the transaction broker, he was
not the seller and, therefore, he has no interest as far as
ordinary loss etc. I suspect he was not knowldgeable about how
to handle the credit where the problem lies. If the broker
asked escrow to issue the credit in escrow, there will be no
tax impact on him and thus no 1099 needed. If he did not
instruct escrow to account for the credit because of
inexperience etc., then he is looking for a way write it off.

I suggest that you contact the broker and explain the issue
and it might be easier to deal with him/her than the IRS
escpecially that you two have enough goodwill to have a
substantial credit exchanged.

CalNeva
http://www.AmericanWest.biz

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**THE-RFI-EMI-GUY** wrote:

- quote -

I certainly agree with your position on this. And a
1099=MISC should not have been issued. (As an aside it
would appear that since it was a real estate broker who sold
you HIS property, he's trying to convert a reduction of
capital gain into ordinary loss! but we don't know that for
a fact.)

But, if the broker won't correct it with IRS (with a zero
amount), then you should account for it on your tax return
by attaching a statement to the return outlining the facts
and also stating that you will reduce the basis of the
property. Make sure to send a photocopy of the 1099-misc
with the statement.

ChEAr$,
Harlan Lunsford, EA n LA
Mon 30 Jan 2006

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I bought a fixer upper house in 2005. The real-estate broker
("transaction broker") offered a $2,250 decorating bonus to
the buyer (me) deliverable on closing. The broker just sent
me a 1099-misc marked $2,250 "other income". I assume he is
reporting this to the IRS as a business expense.

My opinion is that this is simply a return of a portion of
my downpayment, I did nothing to "earn" this bonus aside
from closing a realestate transaction. Am I obligated to
report this as income?

--
Joe Leikhim K4SAT
"The RFI-EMI-GUY"©

"Treason doth never prosper: what's the reason?
For if it prosper, none dare call it treason."

"Follow The Money" ;-P

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >