A real estate commission split belongs on Line 10, commissions and fees.
Why line 10
When your brokerage keeps part of a commission you closed, the amount it keeps is your expense and it goes on line 10. Check the 1099 first: if the brokerage reported only your net share, the split is already out of income and deducting it again double counts it. A monthly desk fee is not a split, because you owe it in a month with no closings, so it belongs on line 20b if it is really rent for space or on line 27a as a desk fee.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so a real estate commission split lands on Line 10 without you sorting it.
Start for freeWhat a real estate commission split is confused with
- Line 20b, rent or lease of other business property
- A charge tied to a closing is line 10; a fixed monthly desk or office charge is rent or an other expense, line 20b or 27a.
- Line 23, taxes and licenses
- Your state licence renewal and local board dues are taxes and licences on line 23, not commissions paid away.
- Line 8, advertising
- Listing photography, staging and signage are advertising on line 8, even when the brokerage bills them against your commission.
Examples that belong on line 10
- A 30 percent brokerage split on a 9,000 dollar commission, 2,700 dollars on line 10
- Amounts paid toward a 5,000 dollar annual brokerage cap out of each closing
- A 25 percent referral fee to the agent who sent the buyer
- A 300 dollar per-transaction broker administrative fee
- The team leader's share taken out of your side of a commission
What does not belong here
- A split that was already excluded from the 1099 the brokerage issued you
- Desk fees and office rent, which are line 20b or line 27a
- MLS and board dues, which are an other expense on line 27a
- Your own unpaid time on a listing that never closed
What to keep
Keep the closing statements showing the gross commission and the brokerage's retained share, plus the year-end producer statement. Compare them to the 1099 so you only deduct the split if the 1099 was gross.
Other expenses on line 10
| Expense | Line |
|---|---|
| Amazon seller fees | Schedule C, Line 10 |
| App Store and Google Play commission | Schedule C, Line 10 |
| Etsy fees | Schedule C, Line 10 |
| pay-per-lead fees from Thumbtack, Angi or Yelp | Schedule C, Line 10 |
| PayPal fees | Schedule C, Line 10 |
| referral fees you pay | Schedule C, Line 10 |
| sales commissions you pay | Schedule C, Line 10 |
| Shopify transaction fees | Schedule C, Line 10 |
| Square fees | Schedule C, Line 10 |
| Stripe processing fees | Schedule C, Line 10 |
| Upwork and Fiverr platform fees | Schedule C, Line 10 |
Related lookups
- Where does office rent go on Schedule C?
- Where does a business license go on Schedule C?
- Where does Google Ads spend go on Schedule C?
Sources
This page explains how Schedule C lines work. It is general information, not tax advice for your situation. If an expense is large or the answer turns on a fact about your business, confirm it with your tax preparer.
Looking for a different expense? The full Schedule C line lookup has every line from 8 to 27 with the expenses that belong on each, and Schedule C expense categories walks the whole form in order.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so a real estate commission split lands on Line 10 without you sorting it.
Start for free