1. No, the amount reported on Form 1099-NEC (from your description) was a rebate and the real estate agent never should have issued that form to you.
It depends who paid the "rebate" the Agent or the Seller. If the Agent paid it, they would simply reduce their income by the amount they gave you. If it was the Seller, they would reduce the sales proceeds. Either way, you would reduce your basis (the purchase price you paid) for the home.
Form 1099-NEC is Non-Employee Compensation, which means income earned. Earned income is subject to tax. You did nothing to earn that income. There is no reason you should select option 1. Option one will charge you income tax as well as Self-Employment tax. (FICA TAX/Social Security tax on the income)
In TurboTax, to get trough the program, you can select "Hobby" to by-pass Self-Employment tax.
It will. however, be added as income.
You can then do the negative adjustment.
You also have the option of not entering the form on your return and paper file with a statement. This option might slow down the processing of your return.
Third option is to have the Broker void the 1099-NEC completely.
HERE is a thread with a similar issue.
HERE is the link to the Texas Real Estate Commission
After entering Form 1099-NEC (and selecting HOBBY)
go to:
Wages & Income
Less Common Income
Miscellaneous Income, 1099-A, 1099-C
Other reportable income START
Type " Rebate on 1099-NEC" or something similar for the Description
Enter the amount of the rebate AS A NEGATIVE NUMBER (put a minus sign in front (-) )
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