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How many years can a real estate agent claim business loss? If an agent has not made any income from real estate can they file anything regarding real estate? If an agent has invested time in prospective buyers but didn't close anything? Pays monthly fees and actively seeks buyers.
Ask your CPA...but as far as I know there is no specific rule about this, it would be a matter of judgement and showing the efforts towards a sale if you get audited.
The way I read the rules, you can claim losses but the IRS wants to see a profit after three years. If no profit after three years, it runs the risk of being placed in a hobby category and losses can't be claimed. I am not an accountant...
The way I read the rules, you can claim losses but the IRS wants to see a profit after three years. If no profit after three years, it runs the risk of being placed in a hobby category and losses can't be claimed. I am not an accountant...
That only really applies to businesses that are more like hobbies - jewelry making, horse breeding, etc. If you can show proof of working, marketing, serving clients, etc, you do not have to make a profit in 3 of the last 5 years. According to my last CPA anyways.
I'm curious. Are agents making $75k+ a year trying to show losses? Or is it just the agents who are making under $30k a year? This isn't something I regularly ask agents, so i'm not sure where most people stand.
Thanx for the input. I was asking in regard to and agent making very little (under 10,000) in the last few years and finally 0 for last year...even tho they have continued to pay monthly dues, market, and service clients...but still made 0. Thanx
CPA time. Really, if the commissions are 0 for a number of years, the IRS might wonder why the person is continuing to pay the dues (in fact, I'm wondering the same thing). If they are in it for personal investment reasons, then it becomes an expense in that business.
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