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hou_ka
Level 1

I am a realtor and need to account for a commission rebate given to a client

During a closing, I receive a check for the net amount of my commission and then deposit the check as Income in my account. I recently gave a client a commission rebate and this was taken from my gross commission. My broker said I still need to account for the commission rebate as it's part of the gross commission and will be reported on my 1099. How do I account for the rebate commission? If I create a JE with credit to Commission Rebate and debit to RE Commission, it decreases the amount I have netted. How do I account for the amount I did not receive via a check? Should I record the RE commission I receive in a different way as opposed to a direct deposit to my account? My statements still need to reconcile at the end of the month. Any help is appreciated. Thanks

4 Comments 4
Rustler
Level 15

I am a realtor and need to account for a commission rebate given to a client

One way is to create a service item for the rebate linked to a rebate expense account

 

then on the sales receipt where you record the receipt of the commission

line one: your commission item and the full amount

line two: the rebate item and the amount as a negative number

save and deposit the funds to the bank, then download banking and match

hou_ka
Level 1

I am a realtor and need to account for a commission rebate given to a client

Does this mean I set my broker up as a Customer to be able to create a sales receipt? 

Rustler
Level 15

I am a realtor and need to account for a commission rebate given to a client

Yes, customers pay you, you pay vendors

Rainflurry
Level 12

I am a realtor and need to account for a commission rebate given to a client

@hou_ka 

 

You can certainly create a sales receipt but, IMO, an easier option is to create a journal entry:

 

 DebitCredit
Cash (Deposit)XXX 
Rebate Expense (credit to client)XXX 
   Commission income XXX

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