I am an inactive licensed real estate agent and I recently purchased a home using a broker I used to do business with. He agreed to pay me 1.5% of the 2.5% commission after the close of escrow; now that escrow is closed he wants to take 30% to pay his taxes. I understand that his business took in the whole 2.5% commission so it looks as though he made a lot more money than he actually did, but I was not expecting this when I purchased the house and it is going to cost me about $3000 out of the commission I was expecting, and I still have to pay my taxes on it. How is this usually done? Is there anyway he could report my wages without having to pay taxes on them? Any help would be greatly appreciated.
He shouldnt take the taxes out for himself Your tax and his tax is a different matter you gain whatever you are paid and report it him also If I do recall this is technically illegal as RESPA prohibits kickbacks or rebates
He doesn't make any sense: When he pays you, that reduces his income... so he's only taxes on the 1% he keeps. Are you sure, he isn't suggesting that he has to withhold from you and send the withholding to the IRS state on your behalf?
Real Estate is something that everybody wants, and invests in. One reason is to have your own house, and the other is to take advantage of a possible rise in real estate values. Both are subject to the laws regarding how it will be treated in real estate tax laws. Therefore, it is important to know something, if not everything about what are the tax laws governing real estate taxes. Of course, your tax consultant is the best person to brief you on this. This article skims over the surface of the tax laws. Remember your tax consultant is the right person to advise you. Capital gains tax is not levied on the sale of your 'primary' residence, so long as you have declared it as your 'primary' residence. You must have lived in the house you sold for at least two years before you can claim it as your 'primary residence'.If your profit from the sale is not greater than $ 250,000, if you are a bachelor/spinster, and $ 500,000 if you are married. You pay capital gains tax on the balance of the amount over the limits specified above. To make it clear, let's say you are a bachelor and you sell your primary residence for $ 260,000. You will have to shell out capital gains tax on $ 10,000, which is exactly the difference between the limit fixed under law. If you are married, then you don't pay capital gains tax! Why because the limit above which capital gains tax is payable is $ 500,000. If the sale is above that price, you only pay, as shown, on the differential between the limit, and what you sold it for.
