Paying yourself 3% commission on personal property purchases?

[Jeff Brower]

Good morning everyone. I would like to get some opinions on a situation that I have been contemplating regarding personal purchases. I am soon to be buying a 3 or 4 plex to owner occupy with an FHA 3.5% down loan. I am an agent, and my company will allow you to not pay them a split if you are buying a property for your personal residence. My plan was to buy a place, and pay myself back the 3% commission so that I can, in essence, get into the property for 0.5% down (plus closing and misc costs). I was just thinking though, if I had to pay taxes on that 'income', does this even make sense? If I choose to not charge a commission, I can get the purchase price to be 3% less, since net to the owner is really all they are worried about.

Does it make sense to roll this 3% into the purchase price if I have to pay, say, 30% of that 3% in taxes now? I hope I worded this correctly.

Example.

Situation 1: 200k purchase price, 3% commission payed by seller, I would have to pay ~30% tax on 6k. So I would 'lose' about 2k in taxes.

Situation 2: 194k purchase price, 0% commission. I would pay 0 in tax. (I would, however, have to pay the difference in capital gains if I sell for a profit in future years. And capital gains is a higher bracket if I am thinking correctly. I plan to move out after the year requirement and keep as a rental so I would not qualify for the owner occupied exemption in this hypothetical case).

What would you do?

[Brie Schmidt]

@Jeff Brower - Why not ask for it as a closing cost credit?  That way it is a direct reduction in the amount of money you need to bring and would not be considered income.

If that is not an option it would depend on your personal finances.  If you need the money do #1 if you don't then do #2