- quote -

Hmmm, where did I screw that up? Anyway, Stu, real estate
sales people are never employees, and accordingly get
1099'misc end of year taking whatever expenses they have and
paying SE tax. Those working for the broker like secretary,
bookkeeper, janitor... whever, ARE common law employees and
get W2 forms. the owner however files whichever return
appropriate for his situation, sch c, 1065, 1120, 1120s...
And if incorporated, even he can be an employee (and better
be, if sub s corporation.)

Santa ChEAr$,
Harlan Lunsford, EA n LA

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- quote -

It seems to me that Harlan is right. The sales person is a
common law employee at least (and perhaps a statutory
employee, depending on the statute), but by statute is
treated for tax purposes as an independent contractor.

Stu

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Arthur Kamlet wrote:
I had written:
- quote -

Don't mean what? I was talking only about how one broker
treated his secretary the same as his sales people, and gave
her a 1099-misc end of year.

Ah, the bit about being "statutory employees". strike that wording.

- quote -

Down hear the broker owns the company and as such files
according to his organization. If incorporated, he gets a
salary.

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- quote -

C'mon Harlan, you couldn't really mean that?

A real estate broker is a statutory Non-Employee who gets a
1099 and files a Sch C.

A full-time life insurance salesperson is likely to be a
Statutory Employee. A Statutory Employee gets a W-2 and
files a Schedule C.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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Stuart A. Bronstein wrote:
- quote -

(snipped

- quote -

A broker is the guy who owns the store, so naturally he's in
business for himself, be it proprietor, LLC, C, S,
partnership. Salespeople are independent contractors

- quote -

It does indeed. All real estate salespeople are statutory
employees and file schedule c and get 1099's.
One broker thought that all his employees were so treated,
even his secretary. NOT

ChEAr$,
Harlan Lunsford, EA n LA

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Thanks for the help

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kamlet[at]panix.com (Arthur Kamlet) wrote:
- quote -

If her name is on their card, she could be held responsible
for their conduct. So she should have insurance to protect
her against that.

- quote -

Ok. But real estate sales people are required to be
supervised by brokers, so are statutory employees. I have a
vague recollection of their being an exemption from the
requirement of employee status for some outside sales
people. Does it exist and does it apply to real estate
agents who are not brokers?

Stu

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kastnna <kastnna[at]auburnalum.org> wrote:

- quote -

A Real Estate broker is a Statutory Non-Employee -- an
independent contractor and cannot be an employee.

I can't answer the isue of "employer" contributions -- I
believe this is just additional 1099-Misc income to the
broker that the real estate company has agreed to pony up.

The real estate broker usually funds the SEP IRA weith up to
20% of Net Schedule C profit less statutory items, such as
1/2 SE taxc and SE Page 1 medical deduction.

Example: Sch C Net Profit = 50,000

1/2 SE = 3,825

SE Health Ins = 6,175

Allowable SEP Contrib = 8.000

Calculation 20% x ( 50,000 - [3825 + 6175] ) = 8,000

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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kastnna <kastnna[at]auburnalum.org> wrote:

- quote -

A Real Estate broker is a Statutory Non-Employee -- an
independent contractor and cannot be an employee.

I can't answer the isue of "employer" contributions -- I
believe this is just additional 1099-Misc income to the
broker that the real estate company has agreed to pony up.

The real estate broker usually funds the SEP IRA weith up to
20% of Net Schedule C profit less statutory items, such as
1/2 SE taxc and SE Page 1 medical deduction.

Example: Sch C Net Profit = 50,000

1/2 SE = 3,825

SE Health Ins = 6,175

Allowable SEP Contrib = 8.000

Calculation 20% x ( 50,000 - [3825 + 6175] ) = 8,000

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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I have a new client and I am transferring her SEP-IRA
account over to our broker-dealer from her previous one. I
am not sure the original SEP was established correctly and I
would appreciate your opinions.

The client (Jane Doe) owns a real estate agency (ABC real
estate) with no employees. She does, however, have licensed
real estate agents claiming to be independent contractors
working out of her office. She gets a commission based on
the properties they sell, but the agents work solely on
commission. The agents have business cards and other company
related material with their names on it, but I don't know if
that effects anything.

The SEP plan is setup as "Jane Doe SEP-IRA". I am accustomed
to seeing the plan setup as "ABC real estate SEP-IRA" and
the Client's individual account to be "ABC real estate
SEP-IRA fbo Jane Doe" but this does not appear to be the
case. She makes no employee contribs but ABC makes an
non-elective employer contrib to her account.

Because the other agents are "independent contractors" she
claims they are not eligible employees. Being so, they are
obviously not entitled to any non-elective employer
contributions.

Are there any problems with the agents claiming independent
contractor status? Also does she completely wipe her hands
of their tax reporting and withholding if they are ICs?
Lastly, does the plan need to be refiled so that the ABC is
the plan sponsor and Jane is the sole plan participant.

Please point out any oversights I have made that will cause
Jane future trouble. I am trying to fix this in the transfer
stages rather than having to go back later. Thanks

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