 defer commission? (by Pacman [IL]) Sep 18, 2018 5:31 PM
 defer commission? (by Ne [PA]) Sep 18, 2018 5:35 PM
defer commission? (by Pacman [IL]) Sep 18, 2018 5:40 PM
defer commission? (by Landlord ofthe Flies [TX]) Sep 18, 2018 5:48 PM
defer commission? (by Nicole [PA]) Sep 19, 2018 7:27 AM
defer commission? (by Pacman [IL]) Sep 19, 2018 8:30 AM
defer commission? (by Landlord ofthe Flies [TX]) Sep 19, 2018 10:36 AM
defer commission? (by Pacman [IL]) Sep 19, 2018 7:31 PM
defer commission? (by Pacman [IL]) Posted on: Sep 18, 2018 5:31 PM
Message:
Hi fellow LL,
I'm a real estate licensee who just sold my own multifamily building and pocketed the commission myself. I hang my license under another broker. The commission check went to the broker first and he is going to cut me a check... Is it possible to defer the commission? My tax bracket for this year is already too high. I would owe much less taxes if the commission check comes next year. Can I put the commission in an escrow account somewhere now and have it paid to me in 2019? Please advise.
Thanks,
--73.168.x.xxx |
defer commission? (by Ne [PA]) Posted on: Sep 18, 2018 5:35 PM
Message:
I would imagine that your broker will receive a 1099 from the title company or attorney that handled the sale. Your broker will need to "spend" that money to you or most likely pay taxes on it. --74.37.xx.xx |
defer commission? (by Pacman [IL]) Posted on: Sep 18, 2018 5:40 PM
Message:
NE[PA], thanks for the insight information. I used to do this deferred commission with another broker before in the past. He simply gave me the check next year... However I don't want to leave money with my current broker because he seems to be short of money frequently compared to my previous broker. --73.168.x.xxx |
defer commission? (by Landlord ofthe Flies [TX]) Posted on: Sep 18, 2018 5:48 PM
Message:
Can't defer because checks were issued and broker has to account for allocating that money. Next time don't accept a commission at all. Capital gains tax is lower than income tax. Never accept a commission on your own properties. Instead, take the money you would have received and adjust the sales price accordingly. Remember not to deduct your broker's share.
It's even worse if you're buying. If you're buying and get a commission, you're essentially paying yourself with your own money and then paying income taxes on the money you paid yourself.
Is there any maintenance you can do on rentals to offset that income? --108.69.xxx.xxx |
defer commission? (by Nicole [PA]) Posted on: Sep 19, 2018 7:27 AM
Message:
maybe if it was December but this is too early in the year. --72.70.xxx.x |
defer commission? (by Pacman [IL]) Posted on: Sep 19, 2018 8:30 AM
Message:
Landlord ofthe Flies [TX], thank you for sharing the technique. Yes it makes sense to move the commission proceed to the sales price. I'll do that for the next property... Yes I plan to replace windows on the rentals that I have left. Thank you for another great idea :-)
Nicole [PA], agree --73.168.x.xxx |
defer commission? (by Landlord ofthe Flies [TX]) Posted on: Sep 19, 2018 10:36 AM
Message:
Anytime. Just make sure not to bring up the commission thing until AFTER everything is settled and a final price is reached, while they're celebrating the accepted contract. Definitely do it before the documents are signed and executed. Otherwise they might misinterpret. I've never had anyone object to doing it but I let them know it's for tax purposes since I'm one of the parties. --108.69.xxx.xxx |
defer commission? (by Pacman [IL]) Posted on: Sep 19, 2018 7:31 PM
Message:
Landlord ofthe Flies [TX], thank you for another tip. I first thought that it can be done right before closing. So it should be done as early as accepting the contract. Good to know :-) --73.168.x.xxx |
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