1. Yes. The rebate is regarded as a reduction in the purchase price of the home and is not taxable income to the buyer.
2. No. Logically follows from (1).
Here's an IRS letter on the topic: <a rel="nofollow" target="_blank" href="
https://www.irs.gov/pub/irs-wd/0721013.pdf">https://www.irs.gov/pub/irs-wd/0721013.pdf</a>
Note that a 1099 should NOT be issued to the buyer for the rebate amount.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
