Self Employed Real Estate Agent Help

Correct.

She is a Statutory Nonemployee. She files Schedules C and SE.

If you don't like 531210 Offices of Real Estate Agents & Brokers how about 531390 Other Activities Related to Real Estate

Yes. A good log of phone calls is recommended.

You realize Sec 179 expenses cannot exceed total earned income?

And a cell pone used to be, maybe still is, Listed Property.

Most real estate salespeople put on humongous mileage and find that swamps ou the actual expenses.

Her first license is not a buiness expense. If the school was an "eligible educational institution" as defined in IRS Publication

970 as qualifying for loans from the Dept of Education, she can probably qualify for an education credit or deduction.

Was she ready, willing and able to work with clients last year? If so, she was in business even if not fortunate enough to generate income.

in article OKmdnQ0ad_2wdSXanZ2dnUVZ snipped-for-privacy@comcast.com, runtwoday at snipped-for-privacy@gmail.com wrote on 2/17/08 9:31 PM:

Most likely

How about 531210, Offices of real estate agents and brokers.

yes

If they are really start up expenses, no, they will be amortized.

Which every one gives her the greatest deduction.

Education to enter a NEW trade or business is not deductible but it may qualify for the lifetime learning credit.

The best thing she could do is download a copy of IRS Pub 583, Starting a Business and Keeping Records. And IRS Pub 334, the Tax Guide for Small Business. These should answer all her questions. If she is still confused, she should find a good tax advisor who specializes in accounting for small business.

All freely provided advice guarantee correct or double your money back

Frank S. Duke, Jr. CPA Cincinnati, OH USA

What about the ability to expense $5000 in startup costs (and $5000 in organization costs) in the first year of business, subject to the $50,000 limit?

A related question: For a software company, does software and books purchased before the company is formed qualify as a startup cost? (One may write software, design websites, and so on before opening the doors for business.)

The spouse's income is already over 100K, so the joint AGI may be too high for the lifetime learning credit. Phaseout starts at 94K and ends at 114K for married couples, and is not available for MFS.

Here's something I don't understand in publication 535.

Education expenses. Ordinary and necessary expenses paid for the cost of the education and training of your employees are deductible. See Education Expenses in chapter 2.

You may also deduct the cost of your own education (including certain related travel) related to your trade or business. You must be able to show the education maintains or improves skills required in your trade or business, or that it is required by law or regulations, for keeping your license to practice, status, or job. For example, an attorney can deduct the cost of attending Continuing Legal Education (CLE) classes that are required by the state bar association to maintain his or her license to practice law.

Education expenses you incur to meet the minimum requirements of your present trade or business, or those that qualify you for a new trade or business, are not deductible. This is true even if the education maintains or improves skills presently required in your business. For more information on education expenses, see Publication

970.

Paragraphs 2 and 3 seem to contradict each other. Paragraph 2 says you can deduct the cost to maintain your skills, but paragraph 3 says you cannot deduct costs that qualify you for the minimum requirements. Does this sound contradictory to you? I see "maintain your skills" and "meet the minimum requirements" as the same thing.

I'd say that the cost of the real estate license is deductible, but would it be a startup cost or organization cost?

Also, if real estate school is required by law and regulations, would be it be deductible by paragraph #2?

If you don't meet the minimum requirements, your skills are irrelevant, since you aren't allowed to do the work. Once you're allowed to do the work, maintaining your ability to continue working can be deductible.

Seth