Is it tacky for a Realtor to take a buy commission on their own home purchase? (commissions, sales)

[Trump]

Originally Posted by FalconheadWest

Of course a buyer is allowed to accept their commission if they're licensed. However, the smarter thing to do is reduce the sales price by the amount of the commission so they're not having to pay taxes on it as income, nor give any split to their broker. That's what I've done for my last 3 houses.

Why wouldn't the price reduction instead of receiving a sales commission be subject to taxes? Wouldn't that be a form of tax evasion? Seems foolish admitting to it on a public forum.

[MikeJaquish]

Originally Posted by Trump

Why wouldn't the price reduction instead of receiving a sales commission be subject to taxes? Wouldn't that be a form of tax evasion? Seems foolish admitting to it on a public forum.

No, it is not tax evasion. There is no income. There is no deduction of overhead costs, business expenses.
It is just a lower price on the home.

[FalconheadWest]

Originally Posted by MikeJaquish

No, it is not tax evasion. There is no income. There is no deduction of overhead costs, business expenses.
It is just a lower price on the home.

Thank you. Some times I forget things need to be explained like I'm talking to a second grader.

[Squirl]

Gee, is it tacky for employees to get the employee discount?

[manderly6]

"Tacky" and "income" really shouldn't be discussed in the same conversation. They have nothing to do with each other.

[MikeyKid]

Thanks for the comments all... In retrospect "tacky" was the wrong word.

Sounds like the best thing to do is lower the purchase price.

[Trump]

Originally Posted by MikeJaquish

No, it is not tax evasion. There is no income. There is no deduction of overhead costs, business expenses.
It is just a lower price on the home.

So, if the buyer is also acting as the buyer's agent, where is the commission? The agent was enriched nonetheless through the transaction. Sort of reminds me of those with foreclosures that are faced with paying taxes on what they save by walking away from the property.

[ETex2]

Tacky? Money is money; if it's available to you, go for it. I've done it twice. To me, it's just being smart with your investment.

[Trump]

Originally Posted by ETex2

Tacky? Money is money; if it's available to you, go for it. I've done it twice. To me, it's just being smart with your investment.

Did you pay taxes on it?

[MikeyKid]

I didn't intend for this to be become the "tax cop" thread!