Entering Concessions on a DA - Approved

A concession that is approved before closing to be paid by the Market Center is entered as a concession on Page 2 of the DA. This means that the amount of the concession comes "off the top" and company dollar and royalty are not assessed on this fee.  

If you have broker-approved concessions where the market center is not taking the full amount of company dollar, the concession should be entered as a concession on Page 2. It will come out "off the top" before company dollar and royalty are taken. It will be the market center's responsibility to file this as a valid business expense on its tax return and to issue a 1099 to the recipient of the concession.

Each market center is responsible for establishing its policies and procedures around Concessions, presenting them for approval by the ALC, adding them to the local Policies & Guidelines, and training their associates in the application of concessions. Typically the principal/supervising/managing broker or broker-in-charge is authorized to approve or deny concession requests.