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ramesh-jagannath
Returning Member

If the realtor rebate check is deposited to the escrow account, is it considered tax free? Can I treat this as tax exempted even if W9 is given to the realtor?

 
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DianeW
Expert Alumni

If the realtor rebate check is deposited to the escrow account, is it considered tax free? Can I treat this as tax exempted even if W9 is given to the realtor?

Cash rebates (including money placed in your escrow for future payments made on your behalf). A cash rebate you receive from a dealer or manufacturer of an item you buy isn't income, but you must reduce your basis by the amount of the rebate. What this means, is that the cost of your home, less selling expenses, then less the realtor commission rebate equals the new cost basis for your home.

This information will be used when you sell your new home in the future. All records relating to the home purchase as well as capital improvements throughout the life of your ownership must be kept for the future.

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3 Replies
DianeW
Expert Alumni

If the realtor rebate check is deposited to the escrow account, is it considered tax free? Can I treat this as tax exempted even if W9 is given to the realtor?

Cash rebates (including money placed in your escrow for future payments made on your behalf). A cash rebate you receive from a dealer or manufacturer of an item you buy isn't income, but you must reduce your basis by the amount of the rebate. What this means, is that the cost of your home, less selling expenses, then less the realtor commission rebate equals the new cost basis for your home.

This information will be used when you sell your new home in the future. All records relating to the home purchase as well as capital improvements throughout the life of your ownership must be kept for the future.

ramesh-jagannath
Returning Member

If the realtor rebate check is deposited to the escrow account, is it considered tax free? Can I treat this as tax exempted even if W9 is given to the realtor?

Thanks for your response. I am in a situation where I was not allowed to take the realtor rebate off the sale price. Based on your response, I understand that I can still do the same math for future tracking (Revised sale price by subtracting the realtor rebate), and that there is no tax on this rebate payment (Not considered as an income)
DianeW
Expert Alumni

If the realtor rebate check is deposited to the escrow account, is it considered tax free? Can I treat this as tax exempted even if W9 is given to the realtor?

@ramesh.jagannath You are correct.
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