Real Estate commission rebates are not taxable income, but do reduce your home's basis. The realtor needs to issue you a corrected form.
See TurboTaxMichael1's answer for how to file if the realtor does not issue a corrected form.
"The IRS has issued a private letter ruling that refunds of
commissions by a real estate broker are not taxable income. In the ruling that discuss that no Form 1099
needs to be issued by the broker, and the buyer would treat the refund as a
reduction in the cost of the property.
See PLR 157111-06 (http://www.irs.gov/pub/irs-wd/0721013.pdf).
If your realtor has given you a Form 1099-MISC for any
rebate they did so in error. If they won’t
issue a corrected form you would need to:
·
Prepare a return not including the amount on the
Form 1099-MISC.
·
Attach a statement indicating why it is not
reported (perhaps quoting PLR 1571111-06), and
·
File on paper.
Unfortunately, adding any statement to a tax return negates
the ability to e-file."
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