Tax Law (Questions About Taxes)/Redfin rebate?


Why are the buyers represented by Redfin, a for profit organization, not reporting their supposed “rebate”? Here are the facts; buyers are promised a “rebate” (cash money), a percentage of their purchase price once they close escrow. The truth is this rebate is a portion of the commission earned by the buying broker and otherwise reported as earned income. The buyer doesn’t pay real estate commissions, the seller does. According to the Merriam – Webster Dictionary; a   rebate is a return of a part of a payment.  So how can this be a rebate to a buyer? Bottom line is this is unearned income and it needs to be reported... right?
In addition, it should be accurately recorded for cost basis purposes as well....right?


I have not a clue.  Until I read your e-mail I thought redfin was a breed of tuna.  If the buyer is getting a portion of the cash he/she paid as the down payment on a real estate transaction it may not be income.  Since the net result of his cash payment is not an expense that he can deduct, therefore, if he gets part of the non deductible expense returned he would not have income but less paid out non deductible expense.  On the other hand if it was a deductible expense he would be required to report the returned portion of the deductible expense as income.


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John L. Tidwell


Unemployment tax law both state and federal; determination of employer employee relationship; the usual 20 commonlaw factors for making that determination; and what makes me a liable employer.


Over 20 years of field audit experience with a state agency



Degree in Accounting from Falls Business College

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