In some of our markets we charge a 1.5% listing fee when you sell, and a 1% listing fee when you sell and buy. Our customers who sell first, then buy will pay a 1.5% listing fee on their sale, then get a check back for that 0.5% once they buy, subject to our minimums. To see our current pricing by market visit www.redfin.com/disclaimer
Most people will not owe tax on this 0.5% check but will need to report it on their tax returns
whether they owe or not. We are not required to report this amount to the IRS, so our customers won't receive a 1099 form from us but should work with their tax advisor to decide whether they have any tax obligations and how to report.
We can’t give tax advice because everyone’s situation is different, but in general, the IRS has
said that customer incentives like this payment aren’t gross income but instead just change
home sale proceeds. That means:
- Customers receiving this check who haven’t filed taxes for the year they sold their home should simply add the check amount to their closing statement, effectively increasing their home sale proceeds.
- Customers who already filed taxes for the year they sold their home may be able to report this on their next tax return as home sale proceeds. Or they can consider amending their prior tax return.
Your taxes may be more complicated than is typical, so in either case, we strongly suggest you
work with a tax advisor on how to report this to the IRS.