Do Real Estate Agents Qualify for QBI?

The Qualified Business Income (QBI) deduction is a valuable tax benefit introduced under the U.S. Tax Cuts and Jobs Act. Many professionals wonder: Do Real Estate Agents Qualify for QBI? The answer is often yes, but eligibility depends on how the income is earned and reported. At L&Y Tax Advisor, we help real estate professionals understand and maximize this deduction correctly.

Understanding the QBI Deduction

The QBI deduction allows eligible self-employed individuals and business owners to deduct up to 20% of their qualified business income. This can significantly reduce taxable income if the requirements are met.

Qualified business income generally includes:

  • Net income from a sole proprietorship

  • Income from partnerships or S-corporations

  • Excludes wages earned as an employee (W-2 income)

Do Real Estate Agents Qualify for QBI?

So, Do Real Estate Agents Qualify for QBI? In most cases, independent real estate agents do qualify, provided they are not treated as employees.

Real estate agents usually earn commission-based income and operate as:

  • Sole proprietors

  • Independent contractors

  • Members of LLCs

Because real estate brokerage is not considered a “Specified Service Trade or Business (SSTB)”, agents are generally eligible regardless of income level, unlike some other professions.

Key Requirements for Real Estate Agents

To qualify for QBI, real estate agents should meet the following criteria:

  • Operate as a self-employed individual or business owner

  • Report income on Schedule C, K-1, or similar

  • Earn qualified business income (not W-2 wages)

  • Maintain proper records and documentation

At L&Y Tax Advisor, we also ensure agents meet IRS safe harbor rules when rental or brokerage activities are involved.

How L&Y Tax Advisor Can Help

Tax laws can be complex, and misclassification can lead to lost deductions. L&Y Tax Advisor provides:

  • QBI eligibility analysis

  • Business structure optimization

  • Accurate tax filing and compliance

  • Strategies to maximize deductions

FAQs

Q1: Do Real Estate Agents Qualify for QBI if they receive commissions only?
 Yes, commission-based income qualifies if earned as an independent contractor.

Q2: Does income level affect QBI for real estate agents?
 Generally no, since real estate is not an SSTB.

Q3: Can LLC real estate agents claim QBI?
 Yes, single-member and multi-member LLCs may qualify.

Q4: Can L&Y Tax Advisor help with QBI filing?
 Absolutely. L&Y Tax Advisor specializes in QBI deductions for real estate professionals.

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