Tax Preparation for Real Estate Agents

Tax preparation with Elena Arsen, CPA, CMA · Arsen Accounting Services

Start with how your business is organized

An unincorporated agent generally reports business income and expenses with their personal T1 return, using Form T2125 where applicable. An incorporated business has a separate T2 return. Tell us the legal name that earns the commissions and whether your structure changed during the year. If you have a personal real estate corporation, provide its incorporation and financial records so the required filings can be assessed.

Reconcile commissions and brokerage statements

Gather year-end statements, commission summaries and details of amounts withheld by the brokerage. Identify referral payments, desk fees, transaction charges and adjustments separately. A bank deposit may be a net amount after deductions; using deposits alone can leave the underlying revenue and expenses unclear. Keep any tax slips with the statements and identify amounts included in more than one document.

Document business use and expense categories

Marketing, professional fees, insurance, office costs and other expenses need a business purpose and supporting records. For vehicle use, retain a mileage log and total kilometres as well as operating costs. Home-office costs, equipment and mixed personal/business expenses require separate review. These categories are a record-gathering guide, not a promise that every payment is deductible.

Coordinate GST/HST and your income tax return

Provide your GST/HST registration details, reporting periods, sales records and prior returns where applicable. GST/HST filing is separate from the T1 or T2 and must be included expressly in the engagement. We work from organized records; ongoing bookkeeping and advice on setting up a corporation are separate from the tax-preparation service described here.