Form 1040 Schedule C and Real Estate
Schedule C reports sole proprietor business income and expenses. Real estate agents, property managers, and house flippers use this form to report their professional income, subject to both income tax and self-employment tax.
Who Files Schedule C
- Real estate agents (commission income)
- Property managers (management fees)
- House flippers (property sales as business income)
- Home-based business owners (home office deduction)
- Real estate investors operating as sole proprietors
Mortgage Impact
- Qualifying income = net profit (line 31) averaged over 2 years
- Non-cash expenses (depreciation) may be added back
- Business losses reduce total qualifying income
- Declining income trend is a lending red flag
- 2 full years of returns required
Deductible Expenses
Office rent, marketing, vehicle expenses, licensing, insurance, technology, employee wages, home office (Form 8829), MLS fees, and continuing education.
Related Terms
- Closing — Income verified for mortgage closing
- Equity — Business income builds purchasing power
- Contract — Agent commission agreements
Barnes Walker Business Law
Barnes Walker's attorneys advise Florida real estate professionals on business structuring and tax planning. Request a legal inquiry for assistance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC