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What are IRS Reporting Requirements for Cooperative Commissions?

Brokers who aren't currently practice collecting a W-9 from Cooperating Brokers for ALL real estate transactions might be in for a shock... While this is common practice for lease transactions, many brokers are under the false impression that collecting a W-9 and issuing a 1099-MISC is not required for transactions that are settled through a title company. The mistaken rationale is that listing brokers  don't receive the funds disbursed at title to cooperating brokers, and therefore, don't wash the funds through the brokerage account.  This rationale may also be erroneously reinforced or provided by tax, accounting, and legal professionals who aren't aware or are unfamiliar with the IRS rules for real estate brokerage reporting requirements. 

Read the full article via activerain:
  • December 20 2013 - US
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