I hold funds in escrow - is it counted as income?
I'm a broker/agent who pairs up buyers with sellers overseas. (Similar to Elance and RentACoder, but of course i'm in a much smaller scale)
Here's an example:
The buyer signs the contract with me, and pays me $100,000. I keep the money in escrow in my account until the seller is done performing the service (it usually takes several months). Once the buyer is satisfied, I take my 15% comission ($15,000), then release the money from escrow ($75,000) and send to the seller.
For income tax purposes, on my schedule C, how does it work?
Do I report the entire amount $100,000 as income, then expense $75,000 as "outside services/contract labor"? OR do I only report the $15,000 I earned in comission? The entire $100,000 can be seen traveling through my bank account.
Other info: I did not issue any 1099's because all my sellers (vendors) are overseas corporations. Some of my buyers (less than 10%) issued me a 1099-misc