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"Sally is a real estate broker. Among her acquaintances is a motel clerk named Tom who gives Sally the names of people moving to town. In exchange Sally pays Tom a stipend for the names. Tom does not hold a real estate license. Is this a legal practice?

User Fnokke
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7 votes

Answer:

This is not a legal practice, since Tom needs a real estate license in order to refer any prospective buyers. The law is very clear about the fact that any action involving the procuring of prospects requires a license.

In real life, unless Sally tries to deduct from her taxes the stipend she gives Tom, no one will do anything about this. Even if she does try to deduct that money, the IRS will only reject her deduction. Information is extremely valuable for any business and Tom is a great source of information.

User Carmellose
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