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Definition of Independent Contractor for Real Estate

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Definition: Maintaining independent control of one's business functions, such as work schedules, accounting, and all other activities associated with operating a business, is the basic requirement of being an independent contractor. The "contractor" portion indicates some type of written agreement or contract executed between the independent contractor and the company or person who is hiring them to perform a task, job or function.

Though some definitions of independent contractor state that the person/entity hiring the contractor is not liable for their actions, most state real estate laws make the broker in charge of an agent responsible for their actions. This is one of the reasons that a special treatment of real estate agents was adopted by the IRS. As regards real estate, the Internal Revenue Service has declared real estate agents as "statutory nonemployees" for all tax purposes.

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