Home Office Deduction for Real Estate Agents: Can You Claim It If You Have a Brokerage Desk?

Real estate agents spend most of their working hours outside an office: showing properties, attending open houses, meeting clients, and driving between appointments. But the administrative work (calling leads, preparing CMAs, managing transactions, bookkeeping, marketing) typically happens at home. If the agent has a dedicated home office space, the home office deduction under IRC 280A can save $1,000-$5,000+ in taxes per year.

Can agents claim it with a brokerage office too?

Yes, in most cases. For current guidance, see IRS Publication 535 (Business Expenses). The IRS allows the home office deduction for a taxpayer who uses the home office as the principal place of business for administrative or management activities, even if the taxpayer conducts business at other locations (such as a brokerage office or client properties).

Under the Soliman rule (codified in IRC 280A(c)(1)), the home office qualifies as the principal place of business if:

1. The home office is used for administrative or management activities of the business, AND
2. There is no other fixed location where the taxpayer conducts substantial administrative or management activities

For a real estate agent, the administrative activities include making prospecting calls, preparing listing presentations and CMAs, managing transactions in the CRM, reviewing contracts, handling marketing campaigns, and bookkeeping. If the agent performs these activities primarily at home (not at the brokerage office), the home office qualifies.

The agent’s use of the brokerage office for occasional meetings, printing, or picking up mail does not disqualify the home office, as long as the agent does not perform substantial administrative work at the brokerage.

What about the mileage benefit?

This is an underappreciated advantage of the home office deduction. Without a home office, commuting from home to the brokerage is personal mileage (not deductible). Trips from the brokerage to properties are business mileage.

With a home office that qualifies as the principal place of business, ALL trips from the home office to any business destination are business mileage, including trips to the brokerage. This converts the commute to the brokerage from personal to business mileage.

For an agent who drives to the brokerage 3 times per week (15 miles each way), that is 30 miles x 3 days x 50 weeks = 4,500 miles of otherwise non-deductible commuting that becomes deductible. At 67 cents/mile (2024), this adds $3,015 in deductions.

What records should agents keep?

The IRS does not require specific forms for the home office, but documentation should include:

• Measurement of the office space: Square footage of the office and the total home. A floor plan or sketch with dimensions.
• Photos of the office: Showing the dedicated business setup (desk, computer, files). Photos should demonstrate exclusive business use (no personal items suggesting non-business use).
• Home expense receipts: Rent/mortgage statements, utility bills, insurance premiums, repair invoices.
• Calendar or log: Showing days worked in the home office to document “regular” use.

For the mileage benefit, a mileage log tracking all business trips (date, destination, purpose, starting odometer, ending odometer or trip distance) is required by the IRS to substantiate the vehicle deduction.

Can agents deduct the cost of a home internet and phone?

The business-use percentage of home internet is deductible. If the agent uses the internet 60% for business (client emails, MLS searches, marketing, CRM) and 40% for personal use, 60% of the monthly internet bill is deductible as a utility expense within the home office calculation (if using the actual method) or as a separate business expense on Schedule C.

A dedicated business phone line is 100% deductible. A personal cell phone used for business is deductible based on business-use percentage. If the agent uses their cell phone 70% for business calls and texts, 70% of the monthly bill is deductible.

Related guides:

• Tax deductions for real estate agents, the complete list of Schedule C deductions beyond the home office

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.