Ace the California Real Estate Exam 2026 – Your Key to Property Success!

The definition of a "dealer" in real property, as specified by the IRS, refers to someone who engages in the business of selling real estate. The correct choice identifies a dealer as a person who holds interests in real property specifically for the purpose of selling it to customers. This differs significantly from an investor or a property holder who seeks to generate income through rentals or appreciates property value over time.

In this context, holding real property for investment or for income production does not fit the IRS's definition of a dealer, as these actions indicate a more passive approach to real estate. A dealer is actively involved in buying and selling properties, making their activities more akin to that of a business rather than simply being an investor or landlord. This distinction is important for tax purposes, as dealers are subject to different rules regarding how their income is treated compared to investors.