Agent2Agent in 20815>Question Details

Anthony Dona…, Real Estate Pro in Columbia, MD

since most agents are self employed would it be a good idea to incorporated themselves as a LLC?

Asked by Anthony Donaldson, Columbia, MD Sun Jun 8, 2014

Help the community by answering this question:


You could incorporated yourself as a PA (Professional Associate).

This can help protect your personal life from your business as a realtor.

You will be able to collect your commission the only thing is you will need to register you name PA with the Department of Business Regulation or whoever issues your real estate license in your state so that your broker will be able to pay your commission to the business name.

LLC might not work as only brokers can register an LLC.

Before I became a Broker and opened my own firm I was a PA.

However, before you incorporate I suggest you speak with an account so you can register the corporation in away that you will benefit tax time. My suggestion is as an 1120 S corp so you can carry your business loss or income into your personal taxes and this way you will not be doubled taxed.
1 vote Thank Flag Link Tue Jun 10, 2014
thanks, I'll look into that and speak with an accountant about that.
Flag Tue Jun 10, 2014
Chat first with your attorney and discuss asset protection.
At some point you WILL be acquiring real estate creating greater need for this shield.

If your future involves working closely with investor types, simultaneous closing, assignments, commercial, funding, instruments of debt, mobile home parks, multifamily, complexes, ,you may find this an essential provision.

Then your accountant will direct you regarding your process.
If however your dream to fame and fortune only includes assisting others buy and sell real estate, the need for such protection is diminished, not eliminated.
0 votes Thank Flag Link Wed Jun 11, 2014
Very complicated question that depends on a lot of factors, including the laws of the stare you live in. I am with Dan, go see an accountant that specializes in this area. You will need a lawyer (in many states) to help you set things up so you may as well include a lawyer up front that specialized in this area as well.

0 votes Thank Flag Link Tue Jun 10, 2014
Even though technically we are considered to be self employed, as agents we do work for a brokerage business.
0 votes Thank Flag Link Tue Jun 10, 2014
In Michigan, people first get licensed as a Real Estate "Salesperson" and most just stick with that for their entire career. After getting about 3 years worth of full-time experience under their belt though, some will go on and take the additional courses and the second test in order to be licensed as a Real Estate "Broker".

Only "Brokers" can opt-in to receive their commissions through an LLC. So most can not. Don't know how it works in other states though.
Web Reference:
0 votes Thank Flag Link Mon Jun 9, 2014
There are pros & cons for doing this. You should discuss it with your accountant as the taxes are one of the biggest down side, but if you have a lot of assets to protect, that may put you back on the pro side.
0 votes Thank Flag Link Mon Jun 9, 2014
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