The tax benefits of homeownership

Real Estate Tax Talk

Q: How can real estate agents be a resource for buyers on tax issues, such as the tax benefits of buying vs. renting?

A: Unless a real estate broker or agent is a bona fide tax professional — for example, has an MBA or other specialized training in taxation — he or she should not give clients detailed tax advice. As a real estate professional, you are licensed to help your clients buy real estate — not serve as their professional tax adviser.

If you give tax advice and it turns out to be wrong, it could cost the client a bundle of money, and leave you with a lawsuit for malpractice.

If a client does ask you for tax advice, and you give it, a good practice is to have the client sign a statement providing that he or she has not relied on your advice and that the transaction is contingent on the approval of the client’s tax or legal counsel.