S-Corp for Real Estate Broker vs. Agent

[LCP]

Real estate agent client told us a few years ago he couldn't be an S-corp. I assume it has something to do with licensing here in Michigan. He stated at the time that he could be if he was a broker.

This year he says that he saw something on a change that would now allow him to run his real estate agent business as an S-corp. Does any of this sound familiar?

[Matt Sova]

Agent

I am not sure about the agent status, but I know RE Brokers can be an S-Corp.

[Brian EA]

I am not sure about the agent status, but I know RE Brokers can be an S-Corp.

I set up a few agents as Scorp last year . Yes they can be Scorps

[LCP]

Any clue why someone would think that they couldn't?

[Bees Knees]

Corporations that are not eligible to be S corporations include financial institutions, insurance companies, and domestic international sales corporations (DISC). Maybe somebody saw the DISC and thought of REMIC (real estate mortgage investment conduit) and then that somehow morphed into all real estate activities.

[Matt Sova]

Licensing

It may have something to do with the state licensing requirements. Perhaps an agent cannot hold him self out as a corporation.

[BOB W]

Nys

I just read that in NY as 8/10/04 RE Salespersons are now allowed to be an SCorp or LLC as long as all activity is associated with one broker. Here is the url.

http://www.dos.state.ny.us/lcns/realest.html