Question

Deduct Real estate agent/broker initial licensing and education related as startup costs?

Forum|Forum|1 year ago
June 12, 2024
1 reply
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Just bring this up again as this seems to be different schools of thought

Can you deduct Real estate agent/broker initial licensing and education related as startup costs for a business?

You can't deduct them as educational expenses as per https://www.irs.gov/taxtopics/tc513#:~:text=To%20be%20deductible%2C%20your%20expenses%20must%20be%20for,to%20keep%20your%20present%20salary%2C%20status%20or%20job.

However they might be deductible as startup costs as per

https://www.irs.gov/newsroom/heres-how-businesses-can-deduct-startup-costs-from-their-federal-taxes

previous discussions

https://ttlc.intuit.com/community/tax-credits-deductions/discussion/can-i-deduct-real-estate-school-costs-and-all-other-real-estate-expenses-such-as-mileage-fees-for/00/485314

https://ttlc.intuit.com/community/business-taxes/discussion/startup-costs-realtor/00/1669480

other blogs:

https://www.thebalancemoney.com/how-to-deduct-startup-costs-on-business-taxes-397608

https://www.nolo.com/legal-encyclopedia/can-you-deduct-the-costs-the-real-estate-license-exam.html#:~:text=This%20means%20you%20cannot%20deduct,state's%20real%20estate%20license%20exam.

Love to hear to discussion from the community.

Employee

Education can't be part of a program that will qualify you for a new trade or business or that you need to meet the minimal educational requirements of your present trade or business.

Right, but perhaps as start up costs?

What about licensing costs?

Employee

A start-up cost is recoverable if it meets both of the following requirements:

It's a cost a business could deduct if they paid or incurred it to operate an existing active trade or business, in the same field as the one the business entered into.
It's a cost a business pays or incurs before the day their active trade or business begins.
The license fees would seem reasonable as a start up cost since that is a cost you would have as a business owner. But would you have taken the education courses if you were already in business?