how to report allowances (rebates) to customers as expenses

[Wadsworth2016]

I am a self-employed loan broker. From time to time, I gave allowances to customers who did refinance with me.

Here is an example of my question:
The lender charges my customer refinance fees $2000.00. After the loan transaction is done, I am the broker who receives the commission of $5000.00 from the lender. I then paid my customer $2000.00 as a rebate.

In this case, the bank will issue a 1099 form showing $5000.00 as my income. However, my net income from this case is only $3000.00

How do I report the $2000.00 expense in my tax?

[ColeenD3]

Are you filing Schedule C? Enter it as a rebate. See the bottom of the screenshot.