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Question
I’m a realtor and closed a couple of leads from another agent. We had a set split and at the end of each transaction it was dispersed to her. How would I record this for tax purposes. Would I need to give her a 1099?
AI accountant’s answer:
Since you disbursed the agreed-upon split amount to the other agent after each transaction, it would be considered a payment for services rendered by that agent. You should issue a Form 1099-NEC to report the total amount you paid to the other agent during the tax year 2022, as long as the total amount you paid is $600 or more. To issue a Form 1099-NEC, you'll need to obtain the other agent's name, address, and taxpayer identification number (TIN), which is usually their Social Security number or Employer Identification Number. Make sure to keep a record of these payments and the 1099-NEC forms for your own tax records as well. Please note that this information is not a substitute for professional tax advice, and it's important to consult a tax professional for guidance specific to your situation.
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Michael Eaton, CPA
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