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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 585
Experience:  10 years experience
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I am not sure if you can see the thread I started

Customer Question

I am not sure if you can see the thread I started with........but it has to do with SE taxes on downline real estate commissions. Client retired from Keller Williams. Received a 1099-MISC, box 7. KW has a profit sharing arrangement, agents receive a piece of their "downlines" efforts after they no longer work there. I have assumed this is subject to SE tax, partly because it is in Box 7, but am questioning this and am finding mixed opinions on this. I am looking for substantial authority one way or another.
Submitted: 1 year ago.
Category: Tax
Expert:  Tax-Scholar replied 1 year ago.

Hello and welcome for using Just Answers! This is an interesting question. There is conflicting case law that could support either answer. However the IRS position is that this would be subject to self-employment tax. This is a common issue for retired insurance salesmen who receive renewal commissions. In those cases the IRS has asserted this is subject to SE Tax.