The first step in determining whether or not real estate commissions are tax deductible is to figure out whether your transaction is a trade. Some real estate agents will tell you that you can deduct only part of your commission as long as it’s not “revolving” (you take a commission and then lose the commission on another transaction).

is real estate commission tax deductible

Other tax deductions you can get include selling your house and keeping the difference between the purchase price and sale price. You also can deduct interest and depreciation. If you have expenses, such as mortgage payments, that you have not paid, you can deduct those as well.

Keep in mind that even if you are able to deduct the commission, it will be much lower than if you took a lump sum from the buyer. If the sale was less than your commission, you could actually save money because your deduction is more than you paid to the seller.

One of the biggest tax deductions for real estate commissions is the federal tax credit. The credit is available for you to claim up to 50% of the cost of real estate commissions that you received from your sales. This is a very good way to start getting your tax deductions back in the form of money that you owe to the IRS.

Before you start calculating how much money you might owe the IRS, it’s important to determine how much money you actually owe. Many people have found that they owe more in state tax than their real estate commissions. Some counties, cities, and other taxing agencies charge a sales tax on real estate transactions, as well. If you are paying taxes on your property that you don’t really need to, consider getting rid of these taxes through an installment plan so that you can keep more of your own money for your own use.

If you find that you are eligible for tax deductions, you should go through your schedule with your accountant to see what options you have available to you and which one will save you the most money. Real estate commissions aren’t just tax deductible; they’re also a great way to build your retirement fund!

If you have questions about whether real estate commissions are tax deductible, contact your tax professional or accountant. They can give you a complete analysis of your situation and help you decide whether or not you can claim any deductions. Even if you aren’t eligible, it’s always nice to know that you’re in good company because you’re not alone and there are many others who need help with taxes.

To find out how much real estate commissions are actually tax deductible, visit the Internal Revenue Service site and see if you qualify. If you can’t find information there, you can always try a tax preparer who will help you calculate your return on your behalf.