Real Estate Broker Reporting Income

[equinecpa]

I feel silly asking this question but just want to confirm that my position is right on this:

Client owns Real Estate Brokerage.

When a sale closes the brokerage gets paid a commission and their agents get paid a commission. The agents' commissions are paid at closing and don't run through the brokers account. The broker has to report the whole commission and deduct the agents' commission as an expense correct?

The brokerage issues the agents 1099's.

I know the bottom line is the same but it makes a difference for state tax franchise purposes.

[Bucky]

I am a licensed real estate broker in Ohio and under the revised code all commission go to the broker who then pays the agent. Your state may be different. No matter if the broker files 1099's yes he would show total income and deduct the 1099 amount as an expense.