My wife is a new realtor and we are trying to figure out how she should set up her business and start paying for expenses. Should she become incorporated? If so, an S-corp or LLC etc.? Should she use a debit card or open a business credit card? We just want to know the best way to set up an account for tax and liability purposes. Thanks!
Unless Florida law differs significantly, an LLC or corporation will not shield your wife from liability from brokerage activities. Liability follows the licensee even if the brokerage pays commissions to an entity.
You need to speak to an accountant regarding tax liability because the answer to which LLC to form will depend on your return as a whole.
If your wife just became a realtor she must hang her license under an existing brokerage first. She is not allowed to own her own company until she becomes a broker herself. I believe she must be an agent for three years then take her brokerage license test.
Also, FREC and ORA have legal hotlines for realtors to call and ask these questions for free.
Ok. Thank you both for the advice!
Hi, Here in AZ a Real estate agent can not have a LLC , the state law permits only PLLC
( Professional LLC ) . One should check with one's State Real estate Commission, or a RE Attorney.
Thank you, Mitch S.
@Laura Richards Hi Laura, I recently became a broker. Do you know which business entity I should create for my brokerage?
@Rich Hupper I am not familiar with MA licensing or corporate structures so I'm really of no help. So sorry. I'd assume MA has licensing advice hotlines similar to FL that could help you. A really good accountant would also be worth the money for this situation.
After reading the articles here, and listening to podcasts and BP'so YouTube videos, I have pretty much settled into getting my MD real estate license but as i launch into this venture, I really wanted to offset my tax liability as well. I dont mind being under a broker for the required time frame, I was only hoping to be able to convert an abandoned LLC into something else so that I could claim RE license classes, mileage, resources (like BP Pro), business cards, blog, and other initial costs as business expenses.
(Sigh) I guess I better consult my accountant since I'm not an agent YET or maybe call our DLLR.
I'm not a tax lawyer, but if you do education on your way to anything, It is deductible if you itemize. When you have your license, maintenance of these tools becomes business expenses. At least that's how I remember doing it...
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