Real Estate Professional Status (REPS) tax planning for real estate investors
Real Estate Professional Status (REPS) tax planning for real estate investors
Proactive and responsive CPA, providing REPS qualification analysis, documentation guidance, and tax planning for real estate investors who want to unlock passive losses, maximize depreciation, and stay audit-ready.
- Built specifically for full-time real estate investors pursuing REPS
- Material participation strategy, grouping elections, and cost segregation expertise
- Tax strategy that goes beyond qualification to maximize what REPS actually saves you
Claiming REPS is powerful. Getting it wrong is expensive.
If you're a full-time real estate investor who wants a CPA who understands the 750-hour test, material participation, and how to turn REPS qualification into real tax savings through cost segregation, grouping elections, and passive loss strategy, this page is for you.
You own rental properties but aren't sure if you qualify as a real estate professional
You've heard about the 750-hour test but don't know what activities actually count
Your passive losses are trapped and you can't use them against W-2 or business income
You're not sure if you materially participate in your rental activities or which of the 7 tests applies to you
Your current CPA doesn't understand REPS or files your losses as passive without asking
You know cost segregation could save you tens of thousands but aren't sure how it pairs with REPS
Sound familiar?
Submit your contact email and we'll reach out within 1 business day to better understand your needs and see how we can help. No obligation, no sales pitch.
Sound familiar?
Submit your contact email and we'll reach out within 1 business day to better understand your needs and see how we can help. No obligation, no sales pitch.
How REPS qualification works
Four steps to unlocking your rental losses. We handle the technical analysis and show you exactly what to document so you can focus on your properties.
Qualify
We analyze your real estate activities against the two REPS tests: more than 750 hours in real property trades or businesses, and more than half your total personal services in those activities.
Participate
REPS qualification alone isn't enough. You also need to materially participate in each rental activity. We determine which of the 7 tests applies to your situation and whether a grouping election makes sense.
Document
We guide you on what to track, how to log it, and what the IRS expects. Good records are your best defense in an audit.
Maximize
Once you qualify and establish material participation, we pair REPS with cost segregation, bonus depreciation, and NIIT avoidance to maximize your tax savings.
Meet your CPA
Sean Culloden, CPA
Specialist in Real Estate Taxation
Sean began his career at Deloitte before founding InvestorWise Tax. He holds a degree in economics from the University of California, Berkeley and studied at the University of Pennsylvania.
Meet your CPA
Sean Culloden, CPA
Specialist in Real Estate Taxation
Sean began his career at Deloitte before founding InvestorWise Tax. He holds a degree in economics from the University of California, Berkeley and studied at the University of Pennsylvania.
Qualifying for REPS is just the first step. The real value is what it unlocks: using rental losses to offset your W-2 or business income, pairing with cost segregation and bonus depreciation to accelerate deductions, and avoiding the 3.8% Net Investment Income Tax.
I help real estate investors figure out if they qualify for REPS, get the documentation right, and then build a tax strategy that takes full advantage of REPS status year after year.
- What this looks like in practice:
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REPS qualification analysis with clear yes/no determination
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Cost segregation and bonus depreciation strategy to maximize deductions
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Passive loss strategy so your rental deductions don't go to waste
What I help with
REPS qualification is the starting line. The real savings come from pairing it with cost segregation, bonus depreciation, and the right elections. I help you qualify and build a strategy that maximizes the tax benefit.
You'll know whether you qualify, what documentation to maintain, and exactly how much you stand to save, with a plan you can follow every year.
The goal is simple: unlock your passive losses, maximize your deductions, and keep everything audit-defensible without overcomplicating your life.
- REPS qualification analysis
- Hour tracking guidance + documentation framework
- Grouping elections
- Material participation test selection
- Cost segregation + bonus depreciation pairing
- Suspended passive loss release planning
Common add-ons (if applicable)
- NIIT (3.8%) avoidance strategy
- Multi-entity coordination
- Amended return / retroactive REPS claims
Quick 15-minute call to see how we can help.
Common questions
Have other questions? Ask on our fit call.
You must meet both tests annually: (1) more than half of your total personal services across all businesses must be in real property trades or businesses where you materially participate, and (2) you must perform more than 750 hours of services in those real property activities. For joint filers, one spouse must independently satisfy both tests.
Qualifying as a real estate professional is only half the equation. You also need to materially participate in each rental activity for the losses to be treated as non-passive. There are 7 tests the IRS recognizes, and you only need to meet one. We help you determine which test fits your situation and what records to keep to support it.
Qualifying activities include property management, tenant screening, maintenance oversight, lease negotiation, and similar hands-on real property operations. Time spent researching properties you don't yet own, reviewing financial statements as a passive observer, attending general real estate seminars, or being "on call" without performing actual services does not count. The IRS looks for specific, documented activities, not just availability.
It's difficult but not impossible. The more-than-half test requires that your real estate hours exceed all other work hours combined. If you work a full-time W-2 job (2,000+ hours), you'd need over 2,000 hours in qualifying real estate activities. Most W-2 earners who qualify have part-time employment or a spouse who handles the real estate full-time.
The grouping election under Reg. §1.469-9(g) lets you treat all your rental real estate interests as a single activity for material participation purposes. This is especially valuable if you own multiple properties. Instead of proving material participation separately for each property, you can aggregate your hours across all of them. The election is made on your original tax return and, once made, applies going forward.
REPS and cost segregation are a powerful combination. Cost segregation accelerates depreciation by reclassifying building components into shorter-lived categories, generating large paper losses. Without REPS, those losses are passive and can only offset passive income. With REPS qualification, those accelerated depreciation deductions become non-passive and can offset W-2 and business income.
Ready to unlock your trapped rental losses?
Get clarity on your REPS qualification, understand your options, and decide if we're a fit.
15 minutes. No pressure. No obligation.
We take 3-5 new RE investor clients per quarter.