The Real Estate Professional Status Decoding REPS - Introduction to Real Estate Professional Status
Nov 1, 2023
Explore the ins and outs of qualifying for Real Estate Professional Status and how it can significantly reduce your taxes. Learn about the crucial 750-hour work rule that determines eligibility. Discover the benefits of properly managing your real estate investments while maneuvering through essential regulations. It's a valuable guide for anyone looking to enhance their financial strategies through real estate.
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REPS Benefits
- Real Estate Professional Status (REPS) helps offset regular income with real estate losses, potentially eliminating taxes for high earners.
- Without REPS, real estate depreciation losses only offset passive income, not earned income.
REPS Qualifications
- To qualify for REPS, spend 750+ hours yearly in a real estate trade or business.
- Also, spend more time in real estate than any other job.
Material Participation and REPS
- Qualifying for REPS lets you treat real estate like any other business regarding material participation.
- Material participation makes income/losses active, while lack of it makes them passive.