Real Estate Agent that has no income but expenses

[brentorsborn]

CA Real Estate Agent that had expenses for 2016; dues, mileage, etc. However no income was generated. No 1099 needed.  Do I add it to my tax return or wait until I receive an income?

[MichaelDC]

Yes. You can still claim your real estate agent expenses, even though you had no income. A loss in your business can offset income in other areas of your return and reduce taxes/increase refund.

You can deduct expenses as long as you can prove that you opened or were in business in the year expenses were incurred. To be deductible, a business expense must be both ordinary and necessary. Please note that if you do not have profit for three out of five years, IRS might question your profit motive.

As a real estate agent, you are considered to be self-employed. You report both income (if any) and expenses on Schedule C/Business Income & Expenses. 

TurboTax will guide you step by step through the process. 

·         Type in business expenses in the search box in the right hand corner of your screen

·         Click jump to business expenses.

If you do have some income you can enter it on the same page.

Here's a good sampling of expenses for real estate agent from realtor.org that you may find helpful:

http://realtormag.realtor.org/sales-and-marketing/sponsored/intuit/9-tax-deductions-every-real-estat...

[Zique711]

Hi,

The link that you provided doesn't go directly to the story.

9-tax-deductions-every-real-estate-agent can take.

http://realtormag.realtor.org/sales-and-marketing/sponsored/intuit/9-tax-deductions-every-real-estat...

[cleb1]

So as a realtor starting out I should be able to claim the fees, advertising, lock box, desk fees, classes, an mileage showing and looking at properties?

[AnnetteB6]

Yes, as long as you were already in the business of being a realtor, you can claim your business expenses for 2019 even if there was no income to report for your realtor business in 2019.  

@cleb1

[Bryanteoa]

If I have not made anything in the last year, what do I put in the 1099 NEC section? I am also no longer working with the brokerage but have to deduct my expenses. 

[KathrynG3]

Do not enter anything in the 1099 NEC section unless you received this form. Unless you started something, this may show that you had one in 2019. If you did start something, be sure to delete it by clicking the trash can icon next to it.

To deduct your expenses, you will need to report them on Schedule C. To do this in TurboTax, scroll to Self-employed income & expenses  and Edit/Add.

For more details, see: Tax Tips for Real Estate Agents and Brokers

[irishween]

I had no income from real estate, but expenses.  I skipped the income and put in my expenses, but Turbotax keeps asking me to fill out  1099 Nec section. It won't allow me to efile without it.  What can I do?

[DaveF1006]

Scroll through your Self-Employment entries and look at the income page to make sure you did not accidently select the box that asks if you have a 1099-NEC. 

Also go to tax tools>tools>delete a form>Form 1099-NEC Worksheet (Untitled). If this form is in your list of forms, delete it.

[trabical]

Which software package should I use as a real estate agent with no income?

[BillM223]

While TurboTax Premier can create a Schedule C (schedule for self-employment income), Premier's ability to allow deductions is limited. Taxpayers who want to be able to use a broad range of business deductions on the sole proprietorship would be best off using Self-Employed (Online) or Home & Business (CD/download). The fact that you had no income in this tax year really doesn't affect this.

[REUser101]

Hello,

So the loss can be reported the IRS, but what about the State taxes (Maine) , is it reported there also?

[GeorgeM777]

Report any and all losses on your federal return and amounts on your federal return will transfer to you ME return.  To the extent, there are modifications to make, TurboTax will prompt you to make adjustments.  In fact, one such adjustment that ME allows whereas the IRS will limit is in the area of a net operating loss (NOL).  ME has decoupled from the federal NOL deduction limit equal to 80% of taxable income. NOL deductions disallowed due to this federal limitation may be deducted for ME tax purposes by claiming a subtraction modification.

@REUser101