Who this is for
Commercial and industrial agents, agents doing land assembly or development sales, and residential agents with presale or long-completion deals.
The seven records
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A deal file with dates. When the listing or buyer agreement was signed, when subjects were removed, when the deal completed. These dates decide the year.
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The commission agreement. What you are owed, by whom, and when it becomes payable. This is what decides when the income is earned.
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Deposits and trust confirmations. Deposits are held in the brokerage’s trust account, not yours. Keep the confirmations so there is no confusion between client money and your income.
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Expenses incurred before closing. Marketing, travel, consultants, due diligence costs you paid. Deductible when incurred, even if the deal closes next year or never closes.
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Referral and co-broker splits. Written agreements and the statements showing who paid whom. A split paid out of your commission is an expense; a split received is income.
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GST on each commission. Commercial commissions carry GST like residential ones. The brokerage statement shows it. Large commercial commissions make the GST return a material number.
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A year-end deal summary. One page: each deal, the status at December 31 (or your PREC year end), the commission earned in the year, expenses to date. This turns a drawer of files into a return.
One thing many people do not realize
Expenses paid in December for a deal that closes in March are deductible in the year they were incurred. The condition is that they were incurred to earn business income. You do not have to wait for the commission to claim them. The reverse also holds. A commission received in January for work done in November is income in the year it was earned under the agreement, usually the closing. Timing follows the agreement, not the bank deposit.
What to prepare
- Your deal list for the year with dates and status
- Commission agreements and brokerage statements for closed deals
- Receipts for deal-related expenses, filed by deal
- Referral and co-broker agreements
- Your PREC’s year end, if any
When professional help may make sense
A deal that collapses after significant expense, a commission paid in instalments, or a dispute over a split. Each affects the year and the amount.
How Rex Tax may be able to help
We prepare returns for commercial agents and PRECs and place multi-year deals correctly. Our guide on realtor record retention covers how long each file must be kept.
Official sources
- CRA guide T4002: Self-employed business, professional and commission income
- CRA: Keeping records
- BCFSA: Real Estate Services Rules (records)
This guide is general information, not advice about your situation. It reflects the rules for the 2026 tax year. It has not yet been reviewed by a practitioner. The information was checked against the official sources listed above on the date shown. Rules change. Check the official sources above or ask us. How we prepare these guides.