material participation question for real estate agent in first year of business

[taxproragini]

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.

[TaxGuyBill]

Does your client meet one of the Material Participation tests?

https://www.irs.gov/publications/p925#en_US_2022_publink1000104582

[taxproragini]

Initially he said not much, but now he says it was 1500 hours, so that answers my question.

Thank you for your response. 

[sjrcpa · Accepted solution]

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.

[qbteachmt]

"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.