We sold and then subsequently purchased a home using the zillow360 program. The program
We completed this program and received our check a couple weeks after closing on our new home. Now zillow has sent me a 1099-MISC. Is this rebate money taxable as income?
I have read a lot of stuff indicating that rebates on home purchases are not taxable and the broker should not issue them. I am hoping that this is the case for me, but I also just want to make sure I file my taxes correctly.
The main difference between a rebate on the home purchase and zillow360 is that the rebate is calculated off of the home sale not the home purchase. Maybe that changes the tax treatment?
Any insight would be greatly appreciated. And if I can provide more details please let me know. Thanks.
Thanks for the reply. I am coming to grips with this reality, but could elaborate on why this is income? I haven't seen rebates considered income before. I really just want to understand and file correctly.
Your 1099-MISC from Zillow is not taxable. Tax Expert @PaulM found an IRS private letter ruling on this topic where the IRS said "a payment or credit at closing from Taxpayer represents an adjustment to the purchase price of the home and generally is not includible in a purchaser’s gross income."
You should report the 1099-MISC as income (to show the IRS you are reporting it) and then add a negative adjustment to zero it out.
Read the full discussion here: I received a 1099-MISC from my real estate agent for a commission rebate. Is this considered taxable income for me?