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Q: Broker's fees for rental residence tax deductible? ( Answered,   0 Comments )
Subject: Broker's fees for rental residence tax deductible?
Category: Business and Money > Accounting
Asked by: tommybiegs-ga
List Price: $15.00
Posted: 12 Sep 2006 08:22 PDT
Expires: 12 Oct 2006 08:22 PDT
Question ID: 764475
I need to know how to deduct real estate broker's fees paid for finding a rental
apartment on my taxes.  Specifically, the following:
(1) If the entire broker's fee can be deducted;  if so, is it counted
against the Standard Deduction (like charitable contributions) or is
it an income adjustment (like student loan interest)?
(2) If the entire broker's fee is not deductible, I'd like to know if
a portion of the broker's fee can be counted as a business expense as
I have a home office in the residence.  If this is possible, would I
list this on a Schedule C?
Subject: Re: Broker's fees for rental residence tax deductible?
Answered By: taxmama-ga on 15 Sep 2006 07:21 PDT
Dear Tommy, 

In general, as an individual, you can't really deduct the 
broker's fee. 

Even if you moved over 50 miles, to a new job or to get 50 miles closer to 
your present job, it wouldn't qualify as a moving expense. 

From IRS Publication 521 - Moving Expenses
Deductible Moving Expenses 
If you meet the requirements discussed earlier under Who Can Deduct
Moving Expenses, you can deduct the reasonable expenses of:

Moving your household goods and personal effects (including in-transit
or foreign-move storage expenses), and

Traveling (including lodging but not meals) to your new home.

So, your next question is, can you deduct it for your business?

Yes. Since you have a home based business, you'll be using
Form 8829 to deduct your office in home expenses.

That form asks you for the square footage of your business area.
And the total square footage of the home. Then, it prorate all the
expenses you list on the form, in proportion to it's business use.

Enter the broker costs on line 20 "Other Expenses".

You may also enter your moving expenses on this form, unless
the mover listed the specific cost to move your office furniture
or equipment. Or you paid someone specifically to do that. 

For instance, when we moved, we paid our copier company to 
bundle up the copy machine, move it, and set it up. We did not
have the movers touch that big, sensitive piece of equipment. 

Hopefully this should answer your question. If you need anything
clarified, please feel free to ask. 

Best wishes,

Your TaxMama-ga
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