topic Commission when buying rental in Investors & landlords

Commission when buying rental

brandonking — Mon, 23 Dec 2019 01:27:59 GMT

I recently purchased a rental property which now receives income. I received a commission from the selling agent when purchasing the house as I am a licensed agent. Do I count this commission on my Schedule E?

Re: Commission when buying rental

koalasfouru — Mon, 23 Dec 2019 03:02:01 GMT

reduces your basis in the rental property but watch for a 1099-MISC

Re: Commission when buying rental

Carl — Mon, 23 Dec 2019 04:42:41 GMT

I am a licensed agent.

The commission received is also income on your SCH C weather you receive a 1099-MISC or not. That commission "should" already be included in the cost basis of the property on the SCH E too. If it's not, then "make it so".

I do believe when working this through the SCH E, the program will specifically ask you for commissions paid and then it takes care of the math for you. However, you will still need to include it yourself as income on the SCH C.