As a home buyer if I get a portion of my realtor's commission, what are the tax implications? How to minimize?
Answer:
Realtors rebating commissions are perfectly legal, just have your agent apply it to your closing costs or downpayment on the HUD, super simple and no tax implications.
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Kickbacks are taxable income, to be reported on your 1040.
Talk to the realtor and see how he/she is handling it taxwise. The realtor will have to show the whole amount, so presumably will want to subtract the portion that goes to you as an expense. If they aren't showing it anyplace, they'd have to pay tax on the whole amount - you'd still be supposed to report it to be legal, but it would be tough to track.
You did not perform any services to earn the income, so the IRS should not tax you as if you really earned a "commission." I would just report it as additional proceeds from selling the house, which may not be taxable if your gain was under $250k ($500k if married).
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