Redfin Responds To Buyer Rebate Tax Issue

It's been an interesting day on the blog. Read up on the comments on Buyer Rebates Are Taxable Income to survey the drama. I plead guilty to commenting crazies and may have to ban myself as spam.

The gist of it all is that yes indeed I was right in that rebates to buyers were potentially taxable and a grey area to venture into. Mostly I suspect because of relative newness of the overall concept and a lack of obvious rules regarding them.

Thankfully Glenn Kelmen of Redfin arrives on a white stallion and lets me get some rest for the rest of the day....

"Hey guys, excellent post, excellent discussion. We just got a ruling from the IRS on this issue, which we'll be announcing in the next day or so. The gist of it is that our refunds are not taxable. The relevant guidance comes from auto rebates and a non-profit's down payment assistance to low-income buyers, neither of which are taxable. We've already sent letters to our clients apprising them of the IRS ruling. An important caveat is that the IRS can rule in general on whether our refunds are taxable, but can't rule on each customer's specific tax situation."
Glenn Kelman, Redfin

So I turned out to be wrong in that the IRS rules opposite to how I thought they would, but right in that the IRS is the only opinion holder that carries a pointed stick.

So all in all thumbs up to Redfin for dealing with this issue. I'm very keen to hear the full announcement and the exact details on proper rebate paperwork etiquette regarding them. (Just please do it by Friday because I have an advertising deadline on Monday!)

And now unless anyone wants to break me of my delusion, I'll just believe I forced the issue and caused buyer rebates to be wholesome natural and good on Federal level.

You are all, most assuredly, welcome.