Should I Form an LLC, PA, S Corporation? | Real Estate Agent & Realtor Legal & Tax Edition 

If you're ready to form your business, I've partnered with the following companies. Use the links below as some of them include coupon codes to receive up to $100 off their services: Inc Authority: bit.ly/incauthoritycoupon IncFile: bit.ly/incfilecoupon Zenbusiness: bit.ly/zenbusinesscoupon Northwest Registered Agent: bit.ly/northwestregisteredagen... BetterLegal: bit.ly/betterlegalcoupon Note: The due dates for when to file the various tax documents have recently changed...they are as follows: Sole Proprietorship: April 15th S Corporation: March 15th Partnership: March 15th C Corporation: April 15th Let me know if you have questions!

Awesome video, clear to the point, simple vocabulary and explains tax vocabulary. No bias view either (which is awesome)repeatedly tells you to consider your business and your needs, and to make your appropriate decision for your business. Other videos just tell you do it this way or no other way, so thanks for being clear in explaining different scenarios.

The best video I've seen on this topic for Realtors! Thanks!

Thanks, Nav! I just passed the Florida Real Estate exam, and I am setting up my LLC now.

Great video, than you so much for such a plain English detailed video. All my questions and concerns were cleared.

OMG! Thank you so much for finally explaining this so we can understand! Heading to watch your other videos now! Thank you thank you thank you!

FAU Grad here who went the real estate route. Thank you for this video. Go Owls!

Thank you for this great video, very clear, I finally found answers of many questions I had.

Finally someone who explains it in plain English with illustration. I've been watching many videos and I finally understand now with the way you explained it, fantastic job thank you!

Thank you so much for this video. It was super helpful!!

You have a great way of explaining things. Looking forward to more videos you'll make. Keep it up!

Great info! Enjoyed the video. Thank you!

Great information, thank you for making the video!

So glad I found your channel!!! Awesome detailed explanation!! Thank you! 🙏

Great video really helped me confirm what I already knew . Thanks for the conversation...very much appreciated.

Thank you! Your video was very simple and easy to understand. Subscribed!

What a great resource you are. Perfect explanation. Excellent content. I definitely would use your services if you were based out of Michigan.

very clear instructional content - thank you

Navi, Thanks for such a great video!

Thank you so much this video help so much...

Hey Navi! Great video! Thanks for helping break this down in understandable terms. I really appreciate that! It was good to know that about $40k is the cut off between a regular SM LLC and and an S Corp for tax purposes. You also mentioned that if you have rental property with passive income that you would NOT recommend an S Corp in order to avoid self-employment tax. Can you say more about that? This is my strategy. I'm currently working on a real estate license, but have already acquired an investment property. I'd love to learn more about the WHY behind not having an S Corp set up for this type of business strategy. Thanks so much!

Make a video Navi if you can on “real estate professional,” and the main 2 tests to meet the 750 hrs and material participation and the pros and cons of it.

Amazing information!! I am a new agent and was very confused but this clarified a lot -- also mid video I realized we went to the same school haha

This was a great video!!!!!

I am a new real estate agent in florida and this video just clarify all my questions about what type of entity do I need . Thanks

Great information

Mr. Maraj, you incorrectly stated the 1120 due date as March 15th. The deadline was changed to April 15th a couple of years ago. Otherwise, very good explanation...similar to the one I use in my practive.

Thanks you so much

WOW!! What a GREAT video that explains everything in a reasonable or easy way to understand for the rest of us that don't know much or how it works.... THANK YOU!! You have a new follower for life and also would like to know what part of Florida are you in? How can I get your info? I'm excited to get in touch with you. Thank you again ! Respectfully, Alfonso

Very informative video.. thank you for this but just an FYI c-corps tax deadline is 4/15 not 3/15.

One thing to be aware of if you file S-Corp and even though you get to avoid the 15% self-employment tax. You will not receive credit towards your Social Security. This is something you should understand if you choose to go this route.

In Texas, only a Broker can be paid commission, so a solo agent could not form an s-corp

Hey Navi, I was really interested on what you had touched base on towards the end of this video when you mentioned the MM-PLLC and hoped you continued a bit on that. My question is as the sole owner while investing in properties as well and having to file self employment, what would you recommend? Continuing to file as Sole-Prop and having a SM-PLLC?

This was great and wished I had seen this 1st. I formed my PA last year (December; Florida) thinking I needed to do this to file all my expenses tor tax. I just applied for my EIN as a LLC. I haven't made any money as a realtor as yet. What election you think I should make (S/C or nothing as yet) and which form(s) to file? I feel like I screwed up. The EIN says Sole Member. Thank you

Hello Navi, great video by the way! I’m in the process of getting my FL brokers license. I am in the midst of studying for my exam and of course learning more about LLCs, sole proprietorships and so forth. I have not made up my mind about obtaining a PLLC but, if I do and my current licensing status is upgraded to active broker or associate. Will the PLLC entity designation be dropped? I’m sorry if this is a dumb question.

Hello, I am in the process of getting my real estate agent license. Before signing on with a broker, I wanted to know if an LLC should be formed. Additionally, would a SM LLC with a sole prop tax classification be done until I hit that 40k income bracket and move into an S corp? And how do you pay yourself from your commission that goes into your LLC?

Hi, thanks for sharing. is this information still relevant today for a real estate agent?

Would you recommend an LLC for a doctor or PLLC? Thanks br. Great content!

This is what I NEEDED! This month alone I am projected to make 57,000 if my deals close. I am NOT trying to pay so much in taxes. I filed for my llc last night, and plan on submitting my s corp as soon as I’m approved!

My bank made it impossible to open a business bank account. I had even setup a separate tax id and official sole proprietorship with the state. They were basically trying to force me to open an llc to be able to open a bank account.

Oh wow so good thing I always file my taxes early. I just started the S corporation recently. But I didn’t know I was supposed to hire a payroll company. Can you recommend one?

Fantastic video - very helpful. At the end, you recommend that if you own a rental property that you should keep it in an LLC and have it taxed as a sole proprietorship. Are there cases where you might have a specific LLC for your rental and then create a PLLC for a separate business as a realtor?

how should you file as a real estate agent that owns rentals with passive income?

What a great illustration on tax types and entity types!! I'm a Realtor in NC (broker only state) and want to form an LLC. If my husband becomes licensed, how would you recommend setting this up? An LLC for MM? I know you said you wouldn't necessarily recommend MM for real estate agents but in this case, in your professional opinion, is this the type you would recommend?

It seems like the tax benefits of an S Corp. go away when you’re high earner because I when your salary increases to ~140,000, the social security tax is capped. Can you confirm?

Would this apply to life insurance agents/brokers as well?

So I am about to become a real estate broker and run my own business on my own and eventually hire a team. Should I start off as a PLLC?

I just read that in New Jersey you can't get paid as an LLC or any business entity for that matter. Only a natural human is eligible to receive a real estate license and real estate commission payment.

Thanks for the great video, I need some clarity, I am recently licensed and my wife has been license but part timing real estate until now. We are forming a team and will be filing for a license. Can we in fact file for a PLLC and then have my wife a partner in entireties. I live in south Florida

Hello Navi, thank you, this was really great information, I am a realtor in Miami, I opened at the end of December 2020 a PA, because of a big sale that was closing in January 2021. In 2020 I didn't get any commission under my PA, do I still have to file my tax return for the PA on March 15?

Hey Navi, great content! Thanks for explaining all this. I had a quick question for you: I am both a realtor and loan officer. Can I use the same PLLC/LLC for both incomes? Or would I have to have a separate LLC for each? Both have state licenses. Thanks!

Navi thanks I’m a new agent in GA. Been with my broker for a month now. I will be creating a new LLC to send my commissions to. My question with a LLC are you free to take money out like a personal bank account ?

Great video! As an LLC > sole proprietor will that allow me to deduct business-related expenses as well such as advertising costs?

Great video. My wife and I started a partnership LLC and disregarded for tax purposes. We own rentals and I plan on getting my real estate license. We did not do the S-Corp, can’t we still file a Schedule C as a simple partnership? Would you recommend putting personal stuff (rentals) in one company elected as Schedule C and to create a new LLC for engaging in real estate activities?

Could you please explain K 1 for S. corporation

Awesome video! I'm a realtor and I have rental property. Should I create a separate LLC for being a realtor and for my rental property? Thank you!🙏🏻

Would you recommend a multi member LLC for someone who does wholesaling with their spouse, but also has their license and sells homes?

Hey Navi, I’m a real estate agent in Alabama. When creating an LLC do I also need to have an EIN. Also should the LLC be my name?

Couldn't a single owner LLC that is taxed as an S-Corp pay themselves using Form 1099-NEC instead of the Salary (Salary like you said would incur a Self Employment tax) if they are passive owners of the rental property?

What if you are married and both husband and wife have their Real Estate License and want to work together? Can you form a SM LLC with a married couple and have both licenses underneath? Would you recommend 1 MM LLC or 2 SM LLC's instead? Or Is it possible to have 1 SM LLC with 2 licenses.

Hey Navi! Can “DACA” file as an S-Corp?

Awesome video! If you are an LLC can you then file later for PLLC if you decide to get a state license later.

Hi Navi, where in Fla is your office?

Hi Navi ,Im In Licensed Realtor in Nevada Should I file LLC Or SM PLLC . Thank You

Im a loan officer and real estate agent and was going to establish an LLC this year for tax purposes but the Scorp requires more time, costs, paperwork..It seemed like I would be paying more to manage the Scorp than the self employment tax? And just doing a single entity LLC doesn't save taxes.

What is double taxation?

Hi Navi, Should I apply for an LLC or PLLC prior to signing a contract with my brokerage on how to be compensated? Which one is better? Thank you so much!

Hi Navi, first off, thanks for this video. Incredibly helpful. I just passed my Real Estate License exam in California, should I register as an PLLC prior to joining a brokerage?

If a couple of agents husband and wife team up would you recommend me pllc? One of them is full time agent the other has a W2?

So the correct business structure to form is the LLC as real estate agent ? Just wanted to know if I am following through .

I just filed for my LLC and didn't see anywhere to choose the PLLC. Is this necessary as a licensed real estate agent in California?

Great video! Do you know a CPA who focuses on real estate in SoCal area?

What is a reasonable salary for a real estate agent in a market where homes sell for several million dollars and commissions can be very high? Hard to argue to IRS that reasonable salary is 60 grand. Or am I incorrect?

Hi Navi, New real estate agent here (3 months), I have a full time job, and real estate is my part time job. I haven't sold anything yet...but I'm hoping 2022 will be fruitful. Do I need an LLC or PLLC? THNX!

If you file under the LLC, but you haven't transition to the S corp, can you still take advantage of section 179?

Great Video, what do you feel like is the best entity is best for just starting off as a real estate agent making $80-100k a year or more ? I have CCORP right now

Hi Navi, I am a California Licensed Realtor, I work full time as an assistant to my broker and have sold one house on the side. Should I make an LLC and then S Corp? What do you recommend? I do not want to owe a lot in taxes and eventually I will invest in other properties once I am able to do so, Please advise! Thank you.

In California, you can't have a PLLC or use your license under an LLC. As a newer agent in CA, would you recommend just using liability insurance? Also, how would you go about taxation for real estate agents in CA who can't have the S Corp status under an LLC?

Thank you for the value Navi. I'm still a little confused. So I've been a realtor for a year but I haven't made a sell. I will have one though before the year ends. Would I register as a LLC or PLLC?

hi i need someone who would help to set up a real state brokerage do you know anyone who could help as i want to make sure i am covered with everything

Thank you so much for this video but I got a bit confused towards the end. I just became an agent in CA and I have not made a sale yet but I plan to invest in real estate soon. Should I create my LLC now and can my investments be under the same LLC?

hi do you anyone who helps to set up a real estate brokerage

what if you are your spouse are on a real estate sales team together? mmllc?

Does this advice work for photographers too?

What happens when you are employed by a company and receive a salary but also receive a 1099 for additional commissions.

Excellent videos but not much reviews. I'm trying to make my own Real; Estate brokerage and need help and I'm in the state of CA.

Hello So to be clear. When I become a realtor I would need to form an LLC and work under my broker (the law in my state) for better tax break rather than just be an independent contractor? Thx.

Wait so I'm filling out my tax for info for the IRS now. Would I make my legal classification an S corp or an LLC?

Would a Husband/wife team have a multiple member llc

So once you elect your llc for a s-Corp is there a way to change it?

👌

Hello this video came just in time. I pass my state an national to get my Real estate License. So to make sure I get this right I never sold a home yet there is no point of me right now in July or August to form a LLC. I mind as well stay a sole proprietor up until I at least made $40000 an over if that's what your basically saying?????

I'm a new realtor in NYS. I've applied for a LLC already, however, do you know if I can amend it to a PLLC? I also would like to list my son as an employee of my llc. What entity would you suggest I register under? Btw your information was great!

I plan to be a Real Estate Agent and Real Estate Investor. So would that mean I can register as a MM PLLC ? Should I start as a Sole Proprietorship, then when I get 40k in income, transition to a MM PLLC?

Are you based out of Florida? Miami ?

Tai Lopez?

Can a new real estate licensee [sales associate] operate through an LLC legally?…. Here is the scenario: A California real estate licensee [BPC §10014] licensed simply as a real estate salesperson [id §10016] who is not a real estate broker [id §10015], a broker associate [id §10015.3], nor a responsible broker [id §10015.1], is hired as an independent contractor by a real estate broker and, upon the sale of a property, is entitled to a commission payable by the licensed broker to the real estate licensee as per their previously negotiated terms. No problem, however, the real estate licensee has formed an LLC to operate its real estate agency activities. Reasons for doing so are believed to be to obtain liability protection for its members and managers [the real estate licensee] and to minimize excessive self-employment taxation of his/her commissions. The question is then, can the licensed real estate broker pay the LLC directly any commissions that were earned by the real estate licensee? Answer, No… Here’s why: If the licensed real estate broker pays the LLC directly, then, the broker is in violation of BPC §10137 [paying commission to a non-licensed entity; LLC is not the licensee]. If the licensed real estate broker pays the real estate licensee directly, then, the real estate licensee is subject to self-employment tax for the entire commission as he/she accepted payment as an individual and is therefore deemed a Sole Proprietorship. Any money thereafter transferred into the LLC is merely a contribution made by the LLC member and is not deemed income earned by the LLC. Further expenses claimed by the LLC can only offset basis as there is no in come except for any income earned that is not commissions paid to the licensee. The bottom line is the LLC is not authorized to receive commissions as it is not an authorized licensee of the Department of Real Estate and any commission paid to the licensee directly is commission paid to a Sole Proprietor and thus subject to self-employment tax. It is clear that some liability protection is already provided to the real estate licensee by the real estate broker through the hybrid mix of employer-employee and independent contractor relationships. [Business and Professions Code §10032 and §10132, and Civil Code §2079.13(b)] There seems to be, however, no escaping the self-employment tax for a real estate licensee, unless, the licensee is a shareholder of a corporation [with an S-corp status] that is licensed by the Department of Real Estate. This would be a license separate from the real estate licensee license or real estate broker license. It’s important to note that a corporation is not eligible for a corporate broker license issued by the Department of Real Estate if it does not have a responsible broker as one of its officers; a credential a new real estate licensee does not have nor is eligible for except after two year experience among other requirements. To stay in compliance with the Department of Real Estate and the Internal Revenue Service, a real estate licensee should think carefully about how they manage and report their commissions during their first two years of service. Whereas one who has a real estate brokers license can incorporate and secure a corporate broker license thus affording them legal protection and tax advantage while remaining in full compliance of the aforementioned governing authorities.