Can I deduct my fees/expenses for a real estate class?

[Bsch4477 · Accepted solution]

You cannot currently deduct as a business expense education expenses you incur to qualify for a new business or profession. This means you cannot deduct the costs of education courses you take to help prepare for your state's real estate license exam. Nor is the fee to take the exam itself deductible.

[tasshroll]

You can qualify for a Lifetime Learning Credit since your real estate class is a higher education expense.

[GiseleD]

@tasshroll

The Lifetime Learning Credit is 20% of the first $10,000 of qualified education expenses paid for all eligible students. Qualified education expenses are tuition, fees, and course materials required for enrollment or attendance at an eligible educational institution. Qualified education expenses must have been paid directly to the institution when claiming this credit. The maximum credit is $2,000 per return regardless of the number of eligible students. There is no limit on the number of years the credit can be claimed for each student.

However, the taxpayer who posted this a year ago will need to make sure the institution offering the course is considered an eligible educational institution. Per IRS.gov, an eligible educational institution is a school offering higher education beyond high school. It is any college, university, trade school, or other post secondary educational institution eligible to participate in a student aid program run by the U.S. Department of Education.

This includes most accredited public, nonprofit and privately-owned–for-profit postsecondary institutions.

If you aren’t sure if the school is an eligible educational institution:

• Ask your school if it is an eligible educational institution, or

• See if your school is on the U.S. Federal Student Aid Code List. 

Alternatively, if the taxpayer is self-employed, they can just expense the cost of the school on a Schedule C.

[Bsch4477]

To claim the Lifetime Learning Credit the course must be at an eligible education institution. Your school can tell you if it qualifies. 

[TomD8]

If you are paid as an independent contractor (you receive a 1099-MISC instead of a W-2), and if the RE class is a continuing education course required to renew/maintain your RE license, the fees/expenses would be deductible on your Schedule C.