Sch C/W-2 employee

[mecpa]

I have a mortgage professional that is not licensed in the state of CA - so he has no real estate license. He receives income both from a W-2 and 1099 and has his own office and has to pay his own expenses, including commissions to others.

I'm planning on reporting the w-2 income as statutory and including on the Sch C along with an explanation with the return?

Has anyone had this issue and how did you handle it.

Thank you

Michelle

[shively]

Michelle,
IRC 3121(d)(3) defines "Statury employee" rather narrowly as including only 4 occupational groups. As long as your client fits into one of these groups I think you are ok, but if not, you may have a problem. There may also be a problem with an unlicensed broker filing a Sch. C as "self-employed." Hope this helps a little.

Harold