Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What must the listing broker do if the cooperating broker refuses to provide a tax ID number?

1. Ignore the request

2. Write 'refused to provide' on the necessary form

3. Report the incident to the IRS

4. Change brokers

The correct answer is: Write 'refused to provide' on the necessary form

In a real estate transaction, especially in Texas, providing a tax ID number is important for various reasons, primarily concerning compliance with federal tax laws and reporting. If a cooperating broker refuses to provide their tax ID number, the listing broker has a responsibility to document this situation properly. Writing "refused to provide" on the necessary form allows for an official record of the refusal, which is crucial for maintaining transparency and ensuring that there is a clear understanding of the incident for all parties involved, including potential future audits or inquiries. This documentation can help protect the listing broker from any liability or misunderstanding regarding the transaction. It also serves as a reference point if there are further questions about the cooperating broker’s role in the transaction and their compliance with legal requirements. Taking this step instead of ignoring the situation helps uphold professional standards in real estate practices.