Can I deduct commission paid to a real estate agent to find a tenant for our rental property?

[saikes]

Does this rule still apply for 2017 tax filing period? Thank you.

[DDollar]

Absolutely!

[DDollar · Accepted solution]

Yes, a commission you pay to a real estate agent to locate a tenant is a valid rental expense. Enter as an expense in the Rental Properties and Royalties section. 

[glennopp]

Does it need to be amortized over the length of the lease if there is a multi year lease?

[Carl]

Yes. An I emphasize "amortized" and not capitalized.

Also, you mention a multi-year lease. What state are you in? I ask, because the laws of most states (including my state of Florida) specifically state that a residential rental contract flat out can not exceed 12 months. I know this has nothing to do with taxes. But should your tenant run on you after the first year, you'll have a hard time on the legal front enforcing the contract.

[smarttees]

That's wrong. The laws of most states do not specifically state that residential leases can not exceed 12 months. You're getting that confused with the statute of frauds that states leases for more than a year have to be in writing. States don't prohibit leases longer than a year. 

[TomD8]

<<Does it need to be amortized over the length of the lease if there is a multi year lease?>>

Amortization is required only if the aggregate amount paid exceeds $5,000.

https://www.law.cornell.edu/cfr/text/26/1.263(a)-4

[smarttees]

<<Maximum term of a residential lease is 50 years. https://www.law.cornell.edu/cfr/text/25/162.311>>

That section only applies to native (indian) lands. The feds and states do not state a maximum term for a residential lease.

[TomD8]

@smarttees   Appreciate the correction.  Edited my response.

[chromedome]

the monthly rent is $3200. I received a first month's check from the tenant for $1280. The tenant wrote a check to the realtor for $1920 (5% commission for a year lease). can I still write off the $1920 commission even thought it was not paid directly from me but paid on my behalf by the tenant?

[CatinaT1]

Essentially no.  If you received the full $3200 you would have an expense out of that of $1920 commission, but since the tenant has already split the realtor portion out, you have no expense.