Real Estate Professional Status (REPS)

The Real Estate Professional Status Game-Changer

Imagine discovering a tax loophole that allows you to deduct unlimited passive losses from your real estate investments directly against your W-2 income, putting $50,000, $100,000, or even $500,000 back in your pocket. That's the power of Real Estate Professional Status (REPS).

What is Real Estate Professional Status (REPS)?

Real Estate Professional Status is a specialized IRS classification codified in IRC Section 469(c)(7) that exempts certain real estate activities from passive activity loss limitations. Under normal rules, passive real estate losses are limited to $25,000 per year (phased out for higher earners), with excess losses suspended until you sell the property. REPS eliminates this limitation entirely.

How It Works

The IRS recognizes that some taxpayers spend significant time managing, improving, and operating real estate as their primary business. These "real estate professionals" are treated differently than passive investors. Rather than having their losses limited to the annual $25,000 cap, REPS taxpayers can deduct all their real estate losses against ordinary income in the year they occur.

This is possible because REPS taxpayers are not subject to passive activity loss limitations. Their rental real estate is classified as an "active" business activity, making losses available for immediate use against W-2 wages, investment income, and business income.

Historical Context

The Tax Reform Act of 1986 introduced passive activity loss limitations to prevent wealthy individuals from using real estate losses to shelter W-2 income. However, the legislation included an exception for "real estate professionals," recognizing that full-time real estate practitioners needed different treatment. This exception has been refined through Treasury Regulations and IRS guidance over the decades, with the most important clarifications coming through Revenue Procedures and Treasury Regulations 1.469-9.

Legal Framework

REPS is governed by IRC Section 469(c)(7), which establishes the statutory framework. The key regulatory guidance is found in Treasury Regulation Section 1.469-9, which provides detailed rules on material participation, grouping of activities, and what qualifies as real estate activities. The IRS has also issued numerous PLRs (Private Letter Rulings) and technical advice memoranda clarifying application of these rules in specific circumstances.

Who Benefits Most from Real Estate Professional Status?

Not every real estate investor can benefit from REPS, and not every investor who can qualify should pursue it. REPS is most valuable for specific taxpayer profiles with high incomes, significant real estate activities, and substantial passive losses.

Ideal Candidate Profiles

1. Full-Time Real Estate Investors with Multiple Properties

Profile: Sarah owns 15 rental properties across three states generating $200,000 in rental property depreciation losses annually. She spends 40+ hours per week managing tenant relationships, coordinating repairs, analyzing properties, and handling accounting.

Why REPS Works: Sarah easily exceeds 750 hours annually and meets the 50% test. Without REPS, she could only deduct $25,000 of her $200,000 in losses each year, with $175,000 suspended. With REPS, she deducts the full $200,000 immediately, potentially saving $56,000 in federal taxes annually (at 28% marginal rate). Over a career, this can amount to millions.

2. Real Estate Agent with Investment Properties

Profile: Marcus is a highly successful real estate agent earning $300,000 annually. He also owns 8 rental properties with $120,000 in total passive losses. He spends 800+ hours annually on his agent business and another 400 hours on property management.

Why REPS Works: Marcus already works full-time in real estate as an agent. By grouping his rental properties together (the grouping election), he can treat all real estate activities as a single activity. He meets both the 750-hour and 50% tests, and can deduct the full $120,000 against his agent income. This saves approximately $33,600 in taxes annually.

3. Property Manager and Investor

Profile: Jennifer manages 20 properties as a professional property manager (generating $150,000 in management income) and owns 12 properties herself with $180,000 in annual depreciation losses.

Why REPS Works: Jennifer's property management work easily exceeds 750 hours and represents more than 50% of her working time. Her management activities qualify as real estate professional activities, and the grouping election allows her to include her personal investment properties. This unlocks $180,000 in losses immediately, saving approximately $50,400 in federal taxes.

4. Spouse with Day Job Plus Real Estate Partner

Profile: David works as a corporate attorney earning $400,000 annually (and doesn't qualify for REPS). His wife Michelle spends full-time managing their 25-unit apartment building and 8 single-family rentals. She works 1,000+ hours annually on these properties and represents more than 50% of her working time.

Why REPS Works: Michelle qualifies as a real estate professional. Filing jointly, both David and Michelle benefit from REPS. Their $250,000 in annual passive losses can be deducted against David's $400,000 W-2 income plus Michelle's real estate income. This saves approximately $70,000 in annual taxes.

5. Real Estate Developer / Construction Entrepreneur

Profile: Tom specializes in purchasing, renovating, and renting out residential properties. He manages the renovation process and ongoing property management. His activities include analyzing potential deals (200 hours), coordinating renovations (400 hours), and managing tenant relationships and maintenance (350 hours).

Why REPS Works: Tom exceeds 750 hours and represents more than 50% of his working time. He qualifies for REPS and can unlock $150,000 in annual losses, saving approximately $42,000 in taxes.

Step-by-Step Implementation Guide

Step 1: Assess Your Situation (Weeks 1-2)

Before pursuing REPS, evaluate whether you qualify and whether it makes financial sense:

• Real estate hours: Estimate your total annual hours spent on real estate activities including property analysis, management, tenant coordination, contractor supervision, and accounting
• Passive losses: Calculate your total passive losses from rental real estate activities for the past 3 years
• Other working hours: Document your total working hours across all activities to confirm real estate represents more than 50%
• Material participation: Review each property to ensure you meet one of the seven material participation tests (typically involving 100+ hours or more than any other individual)
• Tax bracket: Calculate potential tax savings based on your marginal tax rate

Create a spreadsheet tracking all hours spent on real estate and non-real estate activities. This preliminary assessment determines if REPS is worth pursuing.

Step 2: Consult a Tax Professional (Weeks 3-4)

REPS claims frequently trigger IRS audits. Professional guidance is essential:

• Work with a CPA experienced in real estate taxation and REPS claims
• Review your specific facts and circumstances against IRS guidance
• Discuss the grouping election strategy (combining multiple rental activities into one for material participation testing)
• Evaluate the timing of the REPS claim (typically filed starting with the tax year you qualify)
• Discuss potential audit risk and defensive strategies
• Consider whether a tax attorney's opinion is warranted for audit protection

A comprehensive CPA consultation typically costs $2,000-$5,000 but is essential for proper implementation.

Step 3: Begin Contemporaneous Time Tracking (Weeks 3-52)

This is the most critical step. The IRS demands detailed, contemporaneous documentation:

• Use time tracking software: Implement apps like Toggl Track, Hours Tracker, or timesheet software (see Tools section)
• Daily entries: Log entries daily, not retroactively, using specific categories:
  • Property inspections and maintenance coordination
  • Tenant screening, lease negotiation, problem resolution
  • Contractor management and renovation supervision
  • Financial analysis and deal evaluation
  • Accounting and record-keeping
  • Marketing and showing properties
  • Legal matters and compliance
• Supporting evidence: Keep photos, emails, invoices, and documents supporting time entries
• Property-specific tracking: Track hours for each property separately initially to demonstrate material participation in each

This documentation is your audit defense. Without contemporaneous time logs, the IRS will almost certainly disallow your REPS claim.

Step 4: Make the Grouping Election (Before Tax Filing)

A critical strategic decision is the "grouping election" under Treas. Reg. 1.469-9(g):

• What it is: The election to treat all rental real estate as one activity for material participation testing
• Why it matters: It allows you to combine hours and passive losses across all properties, making qualification easier
• Filing requirement: Must be attached to your tax return or made in writing before filing
• Example impact: Without grouping, you might materially participate in 10 properties but not 15. With grouping, you treat all 25 as one activity and can satisfy material participation once for all properties
• Revocation: Once made, the grouping election is difficult to change, so carefully consider the implications

Your tax professional should document this election in writing and attach it to your return.

Step 5: Organize Documentation (Weeks 3-51)

Develop a comprehensive documentation system for audit defense:

• Time logs: Maintain digital and backup copies of all time tracking records
• Property files: Create a file for each property containing:
  • Deed and property description
  • Photos from inspections
  • Tenant correspondence
  • Repair and maintenance records
  • Contractor invoices
  • Inspection reports
• Activity summary: Prepare an annual summary showing total hours by category and by property
• Supporting evidence: Collect phone records, credit card statements, and email showing real estate activity
• Professional fees: Document CPA and attorney fees related to REPS compliance

Organization during the year prevents scrambling during an audit.

Step 6: Tax Return Preparation (Weeks 52-53)

Work with your CPA to properly report REPS on your tax return:

• Form 8949: Report details of real estate activities and losses
• Form 1040 Schedule E: Report rental income and losses
• Disclosure statement: Include written statement explaining REPS status and grouping election
• Time summary: Attach summary of hours worked showing 750+ hours and 50% threshold
• Conservative approach: Consider being conservative initially (perhaps claiming REPS only on clear-cut properties) to reduce audit risk

Proper reporting significantly improves your audit defense position.

Step 7: Annual Review and Adjustment (Annually)

REPS status must be maintained annually:

• Continue tracking 750+ hours in real estate activities
• Maintain 50% threshold of working hours in real estate
• Monitor changes in your activities or property portfolio
• Review IRS guidance for any changes in regulations
• Consider whether to continue REPS in years with lower passive losses

Timeline Summary

Full REPS implementation typically requires 12 months of contemporaneous time tracking. However, you can begin positioning yourself immediately by starting detailed tracking, then claiming REPS status for the full year on your tax return (filed the following year) based on your documented 750+ hours.

Critical Pitfalls to Avoid

• Retroactive time tracking: The IRS will disallow claims based on estimates or retroactively filled-in logs. Track contemporaneously or not at all.
• Insufficient documentation: Time logs without supporting evidence (photos, emails, invoices) are weak. Maintain comprehensive documentation.
• Not meeting material participation: Each property must meet one of the seven material participation tests. Grouping helps but doesn't eliminate this requirement.
• Violating the "more than 50%" test: If you have a full-time W-2 job that takes 60% of your hours, you don't qualify even if you work 800+ hours in real estate.
• Forgetting the grouping election: Without the grouping election, you must independently qualify on each property, significantly harder to defend.
• Claiming REPS without expertise: REPS claims often trigger audits. The IRS has specific guidance on REPS and sophisticated examiners audit these claims. Professional representation is not optional.

Real Numbers: Concrete Calculations and Tax Savings

Scenario 1: Part-Time Investor Converted to Full-Time

Jennifer transitions from part-time rental investing to full-time property management:

Item	Before REPS	After REPS	Difference
W-2 Wage Income	$150,000	$150,000	$0
Passive Losses from 8 Properties	($120,000)	($120,000)	$0
Deductible Passive Losses	($25,000)	($120,000)	($95,000)
Suspended Losses Carried Forward	$95,000	$0	($95,000)
Taxable Income	$125,000	$30,000	($95,000)
Federal Tax @ 24% Rate	$30,000	$7,200	($22,800)
Year 1 Tax Savings	—	—	$22,800

Plus, Jennifer gains $95,000 in suspended losses that would have been deferred. Over time, REPS could save her $200,000+ in cumulative taxes.

Scenario 2: High-Income Professional with Real Estate Activities

Marcus is a surgeon earning $500,000 annually with real estate investments generating $180,000 in passive losses:

Item	Without REPS (Phase-Out Applied)	With REPS	Tax Savings
Income	$500,000	$500,000	—
Real Estate Losses Available	($180,000)	($180,000)	—
Deductible Amount	$0 (Phase-out eliminates deduction)	($180,000)	—
Taxable Income	$500,000	$320,000	—
Federal Tax @ 37% (top marginal)	$185,000	$118,400	$66,600
FICA/Self-Employment Tax Savings	—	—	$13,770
Year 1 Total Tax Savings	—	—	$80,370

For high-income earners, REPS is extraordinarily valuable. Marcus saves $80,370 in year one, and this repeats annually as long as he maintains REPS status.

Scenario 3: Spouse Strategy

David and Michelle are married filing jointly. David earns $400,000 as an attorney, Michelle qualifies as a real estate professional with $250,000 in passive losses:

Item	Without REPS	With REPS	Tax Savings
Combined Income	$400,000	$400,000	—
Real Estate Losses	($250,000)	($250,000)	—
Deductible Losses	($25,000)	($250,000)	—
Suspended Losses	$225,000	$0	—
Taxable Income	$375,000	$150,000	—
Federal Income Tax @ 35% Avg	$131,250	$52,500	$78,750

The spouse strategy is powerful. One spouse qualifies as a real estate professional, allowing both spouses to benefit from REPS on a joint return. This saves David and Michelle nearly $79,000 in their first year.

10-Year Cumulative Impact

Assuming consistent passive losses across 10 years:

• Jennifer's scenario ($22,800 annual): $228,000 cumulative tax savings (not accounting for time value of money)
• Marcus's scenario ($80,370 annual): $803,700 cumulative tax savings
• David & Michelle ($78,750 annual): $787,500 cumulative tax savings

REPS is one of the most powerful tax strategies available for real estate investors because the benefits compound year after year.

Advanced REPS Strategies for Maximum Tax Savings

Strategy 1: The Grouping Election Optimization

What it is: Strategic use of the grouping election to treat multiple rental activities as a single activity for material participation purposes.

How it works: Under Treas. Reg. 1.469-9(g), you can elect to treat all rental real estate activities as one activity. This has major implications:

• You only need to satisfy material participation once for the entire group
• Hours spent on any property count toward the 750-hour requirement
• All passive losses can be deducted together

Implementation: Without grouping, if you own 20 properties but only materially participate in 15 of them, the 5 properties you don't materially participate in cannot benefit from REPS. With grouping, you treat all 20 as one activity, and REPS applies to all of them. Your CPA should specifically list this election on your Form 8949 or in a separate statement attached to your return.

Caution: The grouping election, once made, is binding and cannot be easily changed. If you later want to treat certain properties separately (perhaps one is a business vs. passive rental), you're stuck.

Strategy 2: Hour-Front-Loading for Multi-Year Sustainability

What it is: Strategic timing of real estate activities to maximize hours in early years of REPS qualification.

How it works: If you're transitioning to real estate professional status, spend extra hours in your first qualifying year on activities like:

• Deep property analysis and market research
• Renovation project management and supervision
• Refinancing and capital improvement planning
• Systems development for management and accounting
• Professional development and education

Example: In year one of REPS qualification, accumulate 1,200 hours (400 hours above the 750 minimum). Document this extensively. If you subsequently have lower real estate activity in year two or three (perhaps due to acquisition of a major operational asset or system), you have built documentation of your commitment to real estate professional activities.

Benefit: Strengthens your position in case of audit, showing REPS status isn't a one-year thing but a sustained professional commitment.

Strategy 3: Spouse REPS with Income Shifting

What it is: Structuring real estate activities between spouses to maximize REPS benefits.

How it works: If you're married, consider having one spouse focus on REPS-qualifying activities while the other generates high W-2 or business income:

• Spouse A: Works as a real estate agent or full-time property manager, spending 1,000+ hours in real estate professional activities, satisfying REPS requirements
• Spouse B: Pursues high-income career (surgeon, attorney, executive) generating $300,000-$500,000+ in W-2 income
• Result: Filing jointly, the passive real estate losses deduct against Spouse B's high W-2 income

Tax savings: For each $100,000 in passive losses, you save approximately $28,000-$37,000 in federal taxes (depending on marginal rate).

Implementation requirement: The REPS-qualifying spouse must genuinely work in real estate (can't be a facade). However, the structure can be optimized by having that spouse handle more of the real estate activities while the other spouse focuses on their primary career.

Strategy 4: Loss Utilization in High-Income Years

What it is: Timing REPS claims to years when you have highest W-2 or business income.

How it works: REPS status can be claimed retroactively on amended returns if you meet the requirements. Consider:

• Year 1: High W-2 income ($400,000), substantial passive losses ($150,000) – File amended return claiming REPS if you meet requirements
• Year 2: Lower income ($200,000), lower passive losses ($80,000) – REPS may not be needed as much
• Year 3: High income again ($450,000), substantial passive losses ($150,000) – Claim REPS again

Caution: This must be done carefully with professional guidance. You can't retroactively change material facts, but you can file amended returns within the statute of limitations claiming REPS status if you meet the requirements.

Strategy 5: Asset Acquisition for Time Tracking Efficiency

What it is: Strategic acquisition of property management systems, software, and services to create documented time commitments to REPS activities.

How it works: Invest in property management systems that create audit trails of your REPS activities:

• Property management software: Buildium, AppFolio, or Rent Manager creates digital documentation of your time spent on tenant management, maintenance, and communications
• Time tracking integrated into accounting: Use QuickBooks with time tracking features to document hours by property and activity type
• Drone inspections: Use drone photography/video for property inspections, creating documented evidence of your inspection activities
• Professional contractor management systems: Use apps like ServiceTitan that track your coordination with contractors and create evidence of your renovation supervision

Benefit: These systems simultaneously improve your property management while creating comprehensive documentation for REPS defense.

Common REPS Mistakes and Recovery Strategies

Mistake 1: Inadequate Time Documentation

The problem: Claiming 1,000+ real estate hours but having only general estimates, not contemporaneous daily logs.

Why it happens: Many investors believe the hours are self-evident from their property portfolio and don't bother with daily tracking until tax filing time.

IRS position: Without contemporaneous documentation, the IRS will completely disallow your REPS claim. The Tax Court has repeatedly held that estimated or reconstructed time logs are insufficient.

Recovery strategy:

• Begin contemporaneous daily time tracking immediately (even if retroactively starting this year)
• File an amended return claiming REPS for prior year if you now have documentation showing you met the requirements
• In case of audit, compile supporting evidence: photos, email timestamps, contractor invoices, property inspection reports
• Have your CPA prepare a detailed narrative explanation of your REPS activities

Mistake 2: Failing the 50% Test

The problem: Working 1,200 hours in real estate but 1,100 hours in W-2 employment, so real estate is only 48% of working time.

Why it happens: Investors hold full-time jobs while trying to qualify as real estate professionals. They meet the 750-hour test but fail the 50% test.

IRS position: The 50% test is mandatory. If you fail it, REPS status is not available regardless of hours worked.

Recovery strategy:

• For future years, either reduce W-2 work hours or increase real estate hours to exceed 50%
• Consider transitioning to part-time W-2 work if feasible
• If you claim REPS retroactively when you haven't met the 50% test, expect an audit and disallowance
• For current year, calculate exactly which activities count toward working hours and focus on growing that percentage

Mistake 3: Not Making the Grouping Election

The problem: Claiming REPS on some properties but not others, and later failing material participation on individual properties that are treated separately.

Why it happens: Taxpayers don't understand or don't explicitly make the grouping election, leaving themselves vulnerable on properties where they don't individually materially participate.

IRS position: Without an explicit grouping election, each property is treated separately. If you don't meet the material participation test on each property, REPS fails for that property.

Recovery strategy:

• On amended return, explicitly make the grouping election and attach a written statement explaining the election
• Consolidate all your real estate activities under the grouping election
• Re-file the amended return with the grouping election clearly stated
• For future years, ensure the grouping election is clearly documented on your tax return

Mistake 4: Insufficient Documentation of Material Participation

The problem: Claiming REPS and material participation but unable to prove you spent 100+ hours on a particular property or more hours than any other individual.

Why it happens: The material participation requirement (having more hours than any other person, or working at least 100 hours and not having someone else work substantially more) is often overlooked.

IRS position: If material participation can't be proven, you can't qualify for REPS on that property, even with the grouping election.

Recovery strategy:

• Implement detailed tracking by property showing your hours vs. any contractor, property manager, or co-owner hours
• Document that you spent more hours than any spouse or business partner
• If you use a property manager, demonstrate that you spent substantial time on oversight and decisions even if they handle day-to-day
• Keep records showing email and phone communications proving your involvement

Mistake 5: Mixing Active and Passive Real Estate Activities

The problem: Claiming REPS on some rental properties while also engaging in real estate trading or development activities, creating confusion about activity classification.

Why it happens: Real estate investors often have multiple types of real estate activities (rentals, flipping, development, brokerage) and incorrectly combine them.

IRS position: Real estate business activities (trading, development) are different from rental activities. Mixing them can jeopardize REPS classification for your rental portfolio.

Recovery strategy:

• Clearly separate active business real estate from passive rental real estate in your accounting
• Claim REPS only on qualified rental real estate activities
• If you also engage in real estate development or trading, ensure those are tracked separately
• Work with your CPA to properly classify each activity on your tax return

Mistake 6: Claiming REPS Without Professional Tax Guidance

The problem: Preparing and filing REPS claims using tax software or DIY methods without CPA/attorney review.

Why it happens: Costs of professional tax services ($3,000-$8,000 for comprehensive REPS planning) seem high compared to DIY options.

IRS position: REPS claims trigger audits at much higher rates than typical returns. The IRS has sophisticated REPS examination teams with deep expertise. An improperly prepared REPS claim is very likely to fail in audit.

Recovery strategy:

• Hire a CPA experienced in REPS cases before filing
• Get a second opinion from a tax attorney if your case is complex
• If you've already filed without professional guidance, file an amended return with professional support
• Work with your CPA to strengthen your documentation before an audit begins

Mistake 7: Neglecting to Maintain REPS Status Annually

The problem: Qualifying for REPS in one year, then failing to meet requirements in subsequent years without realizing it.

Why it happens: Investors assume that once they qualify, REPS is permanent. They reduce real estate activities or hours without monitoring whether they still meet requirements.

IRS position: REPS must be maintained annually. If you fail to meet the 750-hour or 50% test in any year, REPS status is lost for that year.

Recovery strategy:

• Conduct an annual review before year-end to confirm you're on track to meet REPS requirements
• If you're falling short on hours, increase real estate activities in Q4
• Work with your CPA to monitor REPS status quarterly, not just at tax filing time
• Maintain detailed records showing your commitment to real estate professional activities in every year you claim REPS

REPS vs. Short-Term Rental (STR) Loophole: Which Strategy is Right?

Investors often confuse REPS with the Short-Term Rental (STR) loophole, another powerful passive loss deduction strategy. Let's clarify the differences and when to use each.

Factor	REPS (Real Estate Professional)	STR Loophole (Short-Term Rental)
Definition	IRS classification for full-time real estate professionals allowing unlimited passive loss deductions	Technique treating short-term rentals as active businesses, not passive activities
Time Requirement	750+ hours annually in real estate activities plus 50% of working time	No specific hour requirement; must show "active participation" in short-term rental business
Property Type	Any real estate including long-term rentals	Short-term rentals (typically < 30 day average rental period)
Passive Loss Limitation	Eliminated entirely; unlimited deductions available	May still be subject to $25,000 limitation if income exceeds threshold
IRS Risk	High audit risk; requires substantial documentation	Lower audit risk if properly documented; more accepted by IRS
Combination Possibility	Can be used together with STR loophole on same property	Can be used on STR while using REPS on long-term rentals
Best For	Full-time investors with high passive losses; works best with long-term rentals	Investors with short-term rental portfolio; lower documentation burden

When to Choose REPS

• You're a full-time real estate professional (agent, manager, developer)
• You have substantial long-term rental portfolio generating significant losses
• Your passive losses exceed the $25,000 annual limitation
• You have high W-2 income to offset with real estate losses
• You're willing to invest in comprehensive documentation and professional guidance

When to Choose STR Loophole

• Your rental properties are rented on a short-term basis (Airbnb, VRBO, etc.)
• You want lower documentation burden and audit risk
• You don't want to commit to full-time real estate work
• You can meet active participation requirements through secondary efforts

Optimal Strategy: Combined Approach

Many sophisticated investors use both strategies:

• Own short-term rentals as active business using STR loophole
• Own long-term rentals while qualifying as REPS professional
• Potentially rent same property as STR some months, long-term at others
• Result: Maximize loss deductions across portfolio

Essential Tools and Resources for REPS Compliance

Time Tracking Applications

• Toggl Track: ($19/month) Mobile app with automatic categorization, perfect for real estate professionals tracking multiple property activities
• Hours Tracker: ($5/month) Simple, effective time logging for iOS/Android with export capabilities for tax documentation
• RescueTime: ($11.99/month) Automatic time tracking that monitors what you're working on, helpful for retrospective documentation
• Harvest: ($12/month) Integrates time tracking with invoicing, useful if managing client properties or third-party work

Property Management and Documentation

• Buildium: ($99/month) Full property management platform that tracks maintenance, tenant communication, and your involvement
• AppFolio: ($500-$2,000/month) Enterprise property management creating detailed digital records of your activities
• Google Photos/Dropbox: (Free-$10/month) Cloud storage with timestamps for property photos, renovation before/afters, inspection documentation

Accounting and Financial Documentation

• QuickBooks Online: ($40-$200/month) Time tracking integration, expense categorization by property, and professional reporting
• Expense Tracker: ($5/month) Simple mobile app for capturing receipts, invoices, and expense documentation immediately
• Google Sheets/Excel: (Free) Create templates for tracking hours by property, activity type, and weekly summaries

Professional Resources

• NAARC (National Association of Accountants and Real Estate Professionals): Network of CPAs specializing in real estate and REPS
• Treasury Regulation 1.469-9 and Publication 925: IRS official guidance on REPS and passive activity rules (available at IRS.gov)
• AICPA Real Estate Tax Conference: Annual professional development for tax professionals specializing in REPS

Frequently Asked Questions About Real Estate Professional Status

These detailed FAQs go beyond one-liners to provide actionable information:

Related Tax Strategies for Real Estate Investors

REPS is most powerful when combined with other tax strategies. Explore these related topics to maximize your real estate tax savings:

Ready to Implement REPS?

Real Estate Professional Status is one of the most powerful tax strategies available, but it requires proper implementation and maintenance. The combination of detailed documentation requirements, IRS scrutiny, and significant potential benefits means that professional guidance is not just helpful—it's essential.