A buy-sell or deposit-commission means the buyer gets to keep part of the money as compensation for services.
The IRS code section that explains this in section 6041A(b)(2)(B) .
Since the buyer may get to keep part of the money for services rendered it counts as income. The IRS wants a record of the transaction.
Example: You make widgets and we agree that I will sell them for you, but I'm not an employee. We agree that I will pay you $1 each, but can sell them for up to $1.10 each, but don't have to pay you until I sell them. When I sell them you get your $1 each and I keep whatever I got over that amount. If during the year the total amount you sold me equals $5,000 or more, you would issue me a 1099.
Hope this helps!
Cindy
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