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I am a broker and right now I am working in an agency as an…

I am a broker and...
I am a broker and right now I am working in an agency as an associate broker. I want to leave the agency and open my own real estate company.What is the better choice to open my own real estate agency. There are two choices: 1) getting a DBA from a county office as an individual or 2) getting a corporation license through the California real estate Secretary of State. The California Bureau of Real Estate.
I'm looking for the most tax advantage and lower liability.Please advice.
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Answered in 8 minutes by:
3/27/2018
Roy Hadavi
Category: CA Real Estate
Satisfied Customers: 1,394
Experience: Attorney at Law Offices of Rosenstein & Associates
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Hi. My name is ***** ***** I am a licensed California attorney. I would be happy to provide assistance. Please keep in mind that our conversation does not include an attorney‑client relationship and this is for general information purposes only.

Answer: A DBA will provide no liability protection. Anything that occurs will be 100% your responsibility and your personal assets would be at risk. A corporation will provide you with liability for anything that occurs that is not due to a direct action that you took. For example, if a prospective buyer falls and trips at a property that you are showing, you would not be liable, unless you tripped them.

The tax issue is somewhat trickier. Depending on the tax strategies that your accountant will assist you with, you may be able to save more taxes by forming a corporation. As an individual you would have to pay self-employment tax. Whereas, a corporation that does not implement a good tax strategy does pay double taxation. It would be important to speak with your accountant in either case to implement a strong tax strategy.

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Customer reply replied 3 months ago
Thank you for your answer. However, I don't exactly understand the tax part. Meaning by opening a corporation, I get more liability protection, but at the end of the year I will pay more taxes, is that what you said.Please explain more about it.Thank you.

You get more liability protection.

A corporation will pay more taxes, unless you set up a proper strategy to avoid paying more taxes with your accountant.

Roy Hadavi
Category: CA Real Estate
Satisfied Customers: 1,394
Experience: Attorney at Law Offices of Rosenstein & Associates
Verified
Roy Hadavi and 87 other CA Real Estate Specialists are ready to help you
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Customer reply replied 3 months ago
ok thanks

You're very welcome.

Thank you so much for the 5‑star rating! I know rating takes an additional step and I truly appreciate you taking the extra time! It's been my honor and privilege to help you with this. If I can help you in any way in the future, I'll be happy to help. For easy access, my bookmark is: https://www.justanswer.com/law/expert‑royhadavi/ Or, simply request ARoy [email protected] in the first line of your question.

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