Missouri | Real Estate Law
Legal Question
My new commercial brokerage firm is closing its first transaction at the end of November? Is it okay for the escrow company to withhold part of the commission until after January 1 to help reduce the company's income for the current year? - Laurel
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Legal Answer
No. The applicable law in this case is the law of "constructive receipt" which says that if you have the ability to receive something and voluntarily put it off to a later date, you will be deemed to have received it when available, not when you take it. Failure to take the commission and report it accordingly could result in penalties and interest, and possibly charges of tax fraud for intentional failure to report. Also, all signs point to higher income taxes next year and beyond so paying at current rates could be beneficial.
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Post Warren Lindstrom, LLP 12980 Metcalf Avenue, Suite 180 Overland Park, KS 66213
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