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My client started working as real estate agent in 2022. he does not have any income from that activity but did spend about 2k in expenses towards studies, license and fees.
I clicked yes to qualified business under Section 199A.
Do I say yes/no to material participation question on Schedule C?
Thank you in advance for your help.
Best Answer Click here
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Does your client meet one of the Material Participation tests?
https://www.irs.gov/publications/p925#en_US_2022_publink1000104582
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Initially he said not much, but now he says it was 1500 hours, so that answers my question.
Thank you for your response.
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It only counts starting when he became licensed.
It's not a business before then, and the costs to qualify to become licensed are not deductible.
The more I know the more I don’t know.
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"but now he says it was 1500 hours, so that answers my question."
Time spent to train and start a new career is not the same as time working that career.
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