Agent as LLC?

Question

Hello all,

This is my first post on the BP forums. I'm a long time blog reader and I'm just getting started with my own real estate "soon-to-be empire."

I passed my pre-sales exam and received my license a few months ago. Prior to which, I, along with close family and friends, have been acquiring properties for long-term investing and rentals around the NY & LI area as an "undefined" syndicate. This is done under an LLC which ownership equally distributed.

Getting to my question...

As I'm going to become and agent under a brokerage (which I wont mention) should I incorporate myself and defer all earnings from my agent-related business to an LLC? S-Corp? Etc?

Is this possible? Pros? Cons? Tax incentives? Insurance?

Thank you all for your time. I'm looking forward to contributing and becoming a firm member of the community.

J Scott · Answer

Assuming you have an indepedent contractor (as opposed to employee) relationship with your broker, you will be paid via 1099, and it doesn't matter if you take that income as an individual/sole proprietor, LLC/partnership, corporation, etc.

You should speak with a tax professional to determine how best to receive the income based upon your overall tax/financial situation.

Account Closed · Answer

Accountant told me it starts being worth it when you pass the $50,000/year mark as an agent. No clue if that only applies here or throughout the US.

J Scott · Answer

The main liability risks you'd have as an agent should be covered under your E&O insurance.

Jordan Caroleo · Answer

I would assume it's an independent contractor relationship. Only because I don't think MOST brokerage houses list their agents as employees.

The only reason I was thinking of this scenario, and also for the possible tax incentives, is because of the liability protection that comes with it.

But I agree that a tax professional would probably better know the answer.

Any other contributions?

Agent as LLC?

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