Is a real estate license

What is the amount we are talking about?

If it's $13K or less, why doesn't the mother just gift the amount to her daughter after the sale on a tax-free basis. Commission is income and the income taxes would be greater than the savings from the lower capital gains taxes to the mother on sale.*

* I am not a CPA, tax advisor or tax attorney.

of course not, you're a grade a certified monster.

Green: annual exclusion limit was increased to $14000 for 2013.

oldgreyhair
22 minutes ago
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Member since: Nov 2010
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Green: annual exclusion limit was increased to $14000 for 2013.

Thanks OGH.

The commission will be over $14000. So there will be income. So back to the original question, can a person take a commission from a family member for selling real estate? Instinctively I am pretty sure they can. Even if you just pay the person for "assisting" you. I would just imagine the individual can't sign whatever the typical contract a broker signs with their client.

Technically, no. Just as you can't give legal advice to a family member, for a fee without a license to practice law.

$5.25 million gift lifetime exemption just sayin...

If she's not a licensed real estate sales agent she cannot collect a sales commission for selling real estate. Why is this even a question?

If the mother wants to gift money to the daughter, anything up to $14K will be tax exempt. Above that, there would be tax. If a sales commission, the entire amount would be taxable. Probs makes more sense to gift, no?

Of course it makes more sense in almost every situation to gift a child money rather than transfer it in a manner that creates a taxable moment. Just because the gift is over $14k does not mean it is taxable. The amount over $14K would simply count against the mother's ability to transfer the maximum amount permitted under estate laws to her child. In this way, parents regularly gift monies to children to be used as down payments and those gifts do not create tax liabilities for child or parent.*

As for acting as a real estate agent without a license: no, you cannot do that. Collecting a commission = acting as an agent.

*I am not an accountant and neither am I providing legal advice here--this is only my understanding from what I've read and experienced. An attorney and accountant should be consulted for an official opinion that can be relied upon.

My asterix was first so you have to use another symbol.

^I should have said anything up to $14K PER YEAR is tax exempt. ^

I guess Squid has me on ignore because he/she/squid said nothing new.

""I guess Squid has me on ignore because he/she/squid said nothing new.""

greenie, you've been on this board long enough to know very little discussed here is "new". Although, I do like the concept of calling dibs on typographical symbols. You can have the asterisk but I'm taking the ampersand. So there.

&

OP, the plan is a big huge no-no. Real estate licensing exists to protect the public. Decades ago there was no licensing, but the abuses got so bad that now all 50 states and many, many other countries require licensing.

Daughter can't even show the apartment legally if she's not the owner. If daughter happens to get visited by a Department of State fair housing "tester" (I am convinced I have been visited and called by testers) she might find herself in life-changing trouble indeed, especially if somebody wants to make an example out of her.

Any random agent bringing a buyer might choose to report the unlicensed showing activity by the seller's daughter. I would report it to my manager to protect myself, if my buyer and I showed up and unexpectedly found this kind of thing going on.

Even if the daughter only shows the place, and does not negotiate the price (let's say the mom/owner does that), any brokerage firm on the other side of the deal might feel compelled to report the unlicensed behavior to protect their own interests. Or to walk away.

So, methinks the upshot being the sellers would need to avoid all brokerage firms' buyers....and also hope the buyer isn't an attorney or in law enforcement, or a buyer with an attorney who feels uncomfortable enough to urge their client, the buyer, to walk away from such a situation.

The sell side attorney (the mother's attorney) will not cooperate with such illegal activity, guaranteed. No attorney in their right mind would risk their own license like that.

The worst that could happen to the daughter is jail time, fines, probation or shock probation, and a criminal record that is a permanent in New York State that will affect the daughter for the rest of her life.

Kharby, lets relax a little. Jails arent exactly overflowing with children showing apartments for elderly parents. Please.

And yes, i plagerized the * but it seemed a good idea at the time. I hereby edit it to this: :(|) That's a monkey face fyi.

Tough noogs, Kyle. I'm still keeping the &

OP asked what is the worst that can happen, kylewest. I believe what I wrote is accurate, if not, I'm all ears to be corrected.

As opposed to the worst that can happen, the least that can happen, if she gets caught, and somebody official chooses to pursue it, is she pays a defense attorney a few thousand bucks and she gets let off with a scolding because the owner is mom.

I think what they should do is put the daughter on the proprietary lease or the deed so she's showing her own property. This wouldn't cost much at all, shouldn't take too long to accomplish (but obviously it depends on the apartment). Right now I can't think of a downside to that strategy.

Any owner can show his or her own property. Immediate family members of the owner with permission of the owner ... I'm suprised this is a debate *

* I do not work for the Department of State, nor do I understand what this has to do with fair housing or why a fair housing "tester" would make a case out of an immediate family member showing an apartment if there was no fair housing discrimination issue. Imagine the fair housing "tester" going to his or her boss and saying "Here's a non-fair housing case with no discrimination whatsoever, but I still want prosecute the daughter of an elderly woman, our fair housing enforcement quotas be dammed, because you know, what's important is not to find professionals that we regulate who are doing the wrong thing but actually just to be anti-family."

She can take out her mother's appendix too, but she can't hold herself out to the public as a licensed doctor without the license.

Kharby, I think that putting the daughter on the deed is a (possible)recipe for disaster. The mother wants to give her daughter perhaps 6% of the sale price not half of the apartment. "Mother, I own half of this apartment now, remember?" Could it happen? Yes.

It's the daughter who wants to act as the broker. The mother just wants her off her back, saying "But you don't have a license...."

Gifting money as tit-for-tat for performance of service (or for goods) is an explicit no-no when it comes to tax treatment. Income is income, and gifts are gifts. And you are all law-abiding citizens. Even you, greenberg.