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Tax Checklist for Agents Moving to a New Brokerage: From 1099s to Asset Transfers

ttaxattorneys

2026-02-12

12 min read

A practical tax checklist for agents switching brokerages: reconcile 1099s, handle deferred commissions, transfer listings, and update state tax obligations.

Hook: Move Brokerages Without a Tax Surprise

Changing brokerages can feel like a fresh start — new brand support, better splits, more leads. But for many agents the biggest risk isn’t marketing or technology: it’s taxes. Missed 1099s, unrecognized deferred commissions, mis-routed listings, or failing to notify a new state tax authority can produce audits, unexpected tax bills, and penalties. This checklist distills what experienced tax advisors and real estate attorneys are telling agents in 2026: plan the tax steps before you change your lockbox code.

The high-level priorities (answer these first)

Confirm how commissions will be reported — 1099-NEC vs 1099-K, and who issues them.
Document any deferred or held-back fees and know when they become taxable.
Preserve listing and transaction documentation to avoid procuring-cause disputes and tax confusion.
Update state tax registrations and estimated payments when you change residency or earn commissions in other states.
Engage a tax advisor experienced in brokerage transitions — ideally a CPA or tax attorney with real estate practice experience.

Why 2026 makes this checklist more urgent

Industry consolidation and movement continued in late 2025 and into 2026, with major broker networks onboarding large teams. Larger brokerages are deploying new payroll and payments platforms that automatically generate 1099s and 1099-Ks. At the same time, tax authorities have stepped up scrutiny of high-income independent contractors and multi-state income, and IRS guidance continues to treat crypto commissions as property subject to ordinary income rules at receipt.

Result: accounting and reporting methods that worked three years ago may not map cleanly to new systems. Agents who change firms without a tax plan increase their risk of underreported income, duplicate reporting, or missed withholding requirements.

Pre-move checklist (30–90 days before the move)

Request year-to-date commission statements and projected payments.
Ask your current broker for a complete year-to-date (YTD) ledger showing gross commissions, splits, withholding, advances, and any holdbacks or reserves. This is the single most important document for reconciling 1099s later. If you manage many small transactions, consider micro-app workflows to keep those records clean — see how micro-apps are reshaping small business document workflows.
Get written terms for deferred commissions and advances.
If your broker holds commissions (holdbacks), pays deferred fees, or extended advances against future splits, secure a signed agreement that describes conditions for payment, repayment terms, and whether amounts were characterized as loans or compensation. For cash-basis taxpayers, timing of receipt matters; for accrual taxpayers, the earning event matters.
Clarify how pending deals will be handled.
Identify every transaction that is open, pending, or in contingency. Obtain seller/ buyer consent forms needed to transfer the listing and get explicit instructions about who will hold escrow and pay commissions if the transaction closes after your move.
Reconcile past 1099s and bank deposits.
Compare previous years’ 1099-NEC, 1099-K, and bank records. Note any discrepancies so you can request corrected 1099s before year-end. If you received partial commissions as advances, label them clearly in your bookkeeping; a tidy digital folder and consistent document workflows make this far easier — consider the low-cost tech options that teams are using to keep records tidy across locations.
Collect W-9 or W-8 documentation and check your TIN on file.
Ensure your current broker and new broker have accurate W-9 data to avoid backup withholding or misreported payee information.
Talk to a tax advisor about retirement contributions and estimated tax plans.
Many agents reduce tax exposure by funding a SEP-IRA or Solo 401(k) before a move or before year-end — but timing matters if your gross receipts shift between brokers. If you need to coordinate moving teams or small support functions, resources about building small support functions can help you scope that engagement: Tiny Teams, Big Impact.

At-move checklist (day of switch and first 30 days)

Sign a written transfer agreement for each listing you move.
Get seller signatures on new listing agreements if you want the listing to move with you, and keep copies of MLS change forms. Where permitted by law or MLS rules, include an explicit commission clause for pending closings.
Get a written statement from the old broker about pending commissions.
Request an itemized statement listing transactions attributable to services you performed and note any contingencies that could affect whether and when you will be paid.
Provide your new broker with completed tax forms and bank details.
Fill out a W-9 (or W-8 for nonresident aliens) and confirm TIN and legal name. If you expect to be classified as an independent contractor or employee, get that classification in writing.
Secure transaction files and digital copies.
Maintain digital copies of listing agreements, buyer/seller acknowledgments, marketing expenses, and invoices. These support both your tax deductions and procuring-cause defenses. For best practices on storing and moving transaction files in distributed teams, see examples of micro-app driven document workflows at documents.top.
Update state licensing and residency status.
Notify state real estate commissions as required. If you’re changing legal residence or will be working across state lines more frequently, discuss nonresident filing and withholding with your tax advisor.

Post-move checklist (30–180 days after the move)

Reconcile 1099s as soon as they arrive.
In January and February expect 1099-NEC or 1099-K forms from both old and new brokers or payment processors. Reconcile each form to your YTD statements and bank deposits. If amounts don’t match, request an immediate correction. Payment platforms and third-party settlement organizations vary in reporting — you may find reviews of marketplace and payment tooling helpful when deciding how to reconcile overlapping forms: tools & marketplaces roundup.
Track deferred commission payments and tax character.
For cash-basis filers, deferred commissions are taxable when you receive the funds. For accrual filers, they may be taxable when the commission is earned (e.g., closing date). If payments are contingent on future events, keep documentation proving the contingency and when it was resolved.
Account for any state nonresident withholding obligations.
If you earned commissions in a state where you aren’t resident, determine whether that state requires withholding or nonresident tax filings. Some states have mandatory withholding for nonresident sellers or service providers; many others require estimated payments to avoid underpayment penalties.
Resolve duplicate reporting (1099-NEC versus 1099-K).
Payment platforms and broker payment systems can create overlapping reporting. Keep a clean reconciliation showing gross commissions, returns, and reimbursements to produce to an auditor if needed. If you received alternative forms of payout such as tokenized or blockchain-based commissions, review crypto market signal resources such as layer-2 market signals for context on valuation volatility and reporting practices.
Update your bookkeeping system and tax reserve.
Move your income and expense categories to the new broker platform if they provide one, or maintain independent records in QuickBooks, Xero, or similar. Keep a tax reserve equal to expected self-employment and state tax liabilities — a good rule is 25–35% of net income, adjusted by your tax bracket and retirement contributions. For lightweight tech stacks that help small teams stay organized, see examples in the pop-up tech stack playbook.

Actionable rules for handling 1099s and payments

1099-NEC: Typically used to report nonemployee compensation. The broker who controls the payout mechanics and contractual relationship usually issues the 1099-NEC.
1099-K: Issued by payment processors and third-party settlement organizations. If you get a 1099-K, reconcile to ensure it reports payments already included on a 1099-NEC or not.
Correct errors promptly: If a 1099 is wrong, request a corrected form. Don’t rely on the broker to fix it without written follow-up.
Backup withholding: Avoid it by ensuring a correct TIN is on file. If you’ve had backup withholding previously, verify withholding credits when you file.

Deferred commissions and how to recognize them

Deferred commission situations are common when an agent leaves mid-transaction, when brokerages apply holdbacks, or when commissions are paid in installments. Here are practical rules:

If you use the cash basis: Income is taxable when you receive it. A payment received after you leave the brokerage is taxable in the year of receipt unless it’s clearly documented as a repayment of a loan.
If you use the accrual basis: Income is taxable when earned — typically the closing date or when the contract creates an unconditional right to payment.
Contingent payments: If payment depends on future events, the contingency must resolve before income is fixed. Keep written records proving the contingency and its resolution.
Advances: Characterization matters—document advances as loans with repayment terms if you don’t want them treated as immediate income.

Tip: Always get the broker to certify in writing whether a payment is a loan, advance, or compensation. That labeling can be decisive if the IRS or a state auditor questions your return.

Listing transfers: tax and legal practicalities

When you move brokerages, listings don't automatically move with you. State laws and MLS rules determine how or whether a listing can be reassigned. From a tax perspective, the important points are:

Document seller consent to a new listing and keep a clear timeline of when services were performed at each brokerage.
Preserve marketing expense records for activities tied to the listing — deductible whether incurred at the old or new brokerage.
Address pending closings explicitly in your transfer paperwork so commission payer is clearly identified for 1099 reporting.
If a dispute arises over procuring cause or commission entitlement, your transaction files, communication logs, and MLS history are primary evidence. For valuation issues tied to property type and local rules, agents sometimes reference valuation pieces such as modern CMA approaches to understand how specialized property types can affect closing timelines.

State tax notifications and nexus: a must-do

Changing a brokerage can change your state tax exposure in three ways: (1) you may change your tax residence, (2) you may earn commissions sourced to another state, and (3) the new broker’s payroll or payment platform may create withholding obligations. Practical steps:

Notify the state revenue departments as needed if you change residency.
File nonresident returns in states where you earned commissions if those states tax nonresident service income.
Confirm withholding obligations with your broker — some states require withholding on payments made to nonresidents or on gross proceeds tied to in-state real property.
Establish estimated tax payments for new state liabilities to avoid penalties. Your prior pattern of estimated payments may no longer be adequate.

Crypto and alternative payments (2026 considerations)

As brokerages and buyers experiment with cryptocurrency and tokenized payments, agents increasingly receive partial or full commissions in crypto. In 2026 the tax rule remains straightforward but strict:

Treated as property: The fair market value of the crypto at the time you receive it is ordinary income.
Basis and gains: If you later sell the crypto, capital gain/loss is computed against that basis.
Valuation records: Maintain timestamped exchange rates or broker statements documenting the crypto FMV at receipt.

Bookkeeping and tax-saving moves to make now

Separate personal and business accounts and use dedicated merchant accounts where possible.
Use mileage tracking and expense categories aligned to Schedule C (or your entity return) — MLS fees, lockbox, signs, advertising, and education are common deductions.
Max out retirement contributions to reduce both self-employment and income tax exposure.
Consider entity structure (S corp for payroll tax savings, or LLC taxed as S corp) — consult a tax advisor before converting after a move because the timing and payroll setup with your new broker can affect payroll taxes and withholding.

Common worst-case tax errors (and how to avoid them)

Failing to reconcile 1099s: Leads to IRS notices. Reconcile early and request corrected forms immediately.
Mischaracterizing advances: If an advance is a loan but not documented as such, it will be taxed as income.
Ignoring multi-state filing: Nonresident state taxes and withholding can surprise agents who work across borders.
Poor recordkeeping during transfer: Missing seller consents or MLS records can cause commission disputes that become tax headaches.

Short case studies from practice (realistic examples)

Case A: The deferred holdback

Maria left a boutique brokerage in July 2025. The old broker held a 10% reserve for commission disputes and promised payment upon final accounting in January 2026. Maria is a cash-basis taxpayer and received the holdback in February 2026 from her old broker. She reported the amount as 2026 income. Because she had the written agreement showing the holdback and its release, she avoided disputes when reconciling 1099s.

Case B: Duplicate 1099-NEC and 1099-K

Alex received a 1099-NEC from his broker and a 1099-K from the payment processor for overlapping payments. He had kept precise bank deposit records and an itemized transaction ledger. His tax advisor reconciled the two forms and provided documentation to the tax preparer showing the net commissions and corrections requested from the payors.

Case C: Crypto commission

Priya received 1.2 ETH as part of a referral bonus when she moved to a national brand in early 2026. She documented the dollar value at receipt, reported it as ordinary income, and later reported a capital gain when she converted the ETH to dollars. She avoided misreporting by keeping timestamped exchange records and the broker’s crypto payout statement.

How to choose the right tax advisor for a brokerage change

Not all tax pros understand the intersection of real estate operations, 1099 mechanics, and state withholding. When you shop for a tax advisor, prioritize:

Experience with real estate agents — ask for client examples or case studies (anonymized).
Knowledge of multi-state filing and withholding rules.
Familiarity with payment platforms and 1099-K/NEC reconciliation.
Ability to coordinate with real estate attorneys for listing transfers and commission disputes.

Checklist summary: The agent move checklist (quick reference)

Request YTD ledgers and written terms for deferred pay.
Obtain seller consents and new listing agreements where applicable.
Provide W-9/W-8 to your new broker and verify TIN accuracy.
Secure digital transaction files and evidence of marketing expense.
Reconcile 1099-NEC and 1099-K as soon as they arrive; request corrections early.
Document whether disputed/held amounts are loans or compensation.
Confirm state residency, register for state tax accounts if needed, and set estimated payments.
Track crypto and alternative payments at FMV when received.
Engage a tax advisor experienced in brokerage transitions before year-end.

Final recommendations — what to do this week

Get your YTD ledger from your broker today — don’t rely on verbal assurances.
If you plan to move in the next 90 days, schedule a consultation with a tax advisor now; a one-hour session can prevent a five-figure problem later.
Create a digital folder for each transaction and upload all commissions, agreements, and communications to a secure cloud drive.

Why this matters — the bottom line

Brokerage changes are routine, but their tax consequences are not. In 2026, enhanced reporting, multi-state enforcement, and new payment technologies magnify the risk of reporting errors. The difference between orderly documentation and chaotic records can be tens of thousands of dollars in unexpected taxes, penalties, and legal fees. Use this checklist as your defensive playbook.

Call to action

If you’re planning a brokerage change, don’t go it alone. Find a tax advisor who specializes in real estate transitions through our attorney directory. Schedule a consult to review your YTD ledger, deferred pay agreements, and state tax exposure — early planning saves money and stress.

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