When a broker can pay an agent’s commission to a business entity

We get a number of calls from agents who want to set up a legal entity, such as an LLC, with the Texas secretary of state for tax purposes. Generally speaking, the agent wants to have his or her broker pay the agent’s commission to the entity rather than directly to the agent. This is only permissible under Texas licensing law if the legal entity is established as a brokerage entity with the Texas Real Estate Commission.

— Kelly Flanagan, legislative attorney

This is reprinted from the April 2017 issue of Texas REALTOR® magazine. Read the latest issue now.