Explore how our clients have successfully qualified for Real Estate Professional Status under IRC Section 469, unlocking passive activity loss deductions to offset W-2 and active income.
20 highlighted engagements showcasing proven strategies for qualifying and maximizing Real Estate Professional Status.
A dual-income household with seven rental properties structured the spouse's real estate management activities to meet the 750-hour test, unlocking over $420,000 in previously suspended passive losses to offset the physician's W-2 income.
After early retirement, this client transitioned to full-time property management across four residential rentals, documenting over 1,100 hours of qualifying activities to establish REPS and deduct $185,000 in rental losses.
A licensed real estate agent with a portfolio of 12 single-family rentals filed a grouping election under IRC 469(c)(7)(A), treating all properties as a single activity to satisfy the material participation requirements and unlock $310,000 in deductions.
Combining Real Estate Professional Status with a cost segregation study on two newly acquired properties generated over $680,000 in accelerated depreciation, fully offsetting the client's W-2 income and producing a $250,000 tax reduction.
An Airbnb host managing five short-term rentals documented 780 hours of guest communications, maintenance coordination, and property oversight. Combined with the 7-day average rental period exception, the client achieved REPS and deducted $220,000 in losses.
The non-practicing spouse of a dentist earning $480,000 annually maintained detailed time logs covering property showings, tenant management, and maintenance oversight across six units, qualifying for REPS and unlocking $175,000 in suspended passive losses.
A commercial landlord with eight mixed-use properties elected to group all rental activities as one, streamlining the material participation analysis and generating a combined $390,000 in deductible losses against $520,000 in business income.
A client working in commercial property management combined their W-2 hours in the real estate trade with personal rental management activities, easily exceeding the 750-hour threshold and unlocking $145,000 in passive loss deductions against other income.
After qualifying for REPS in the current year, our team identified that the client's spouse had also qualified in two prior years. Amended returns released $340,000 in suspended passive activity losses, generating refunds totaling $136,000.
A self-employed construction contractor restructured their work schedule to allocate more than 50% of working hours to real estate activities, meeting both the 750-hour and more-than-half tests. This unlocked $92,000 in rental losses against contractor income.
The spouse of an attorney earning $650,000 dedicated 820 hours to managing a nine-unit rental portfolio, meeting the material participation standard under Test 1. This allowed $490,000 in cost segregation driven losses to offset the attorney's W-2 income.
When the IRS audited a client's REPS claim, our team's documentation strategy proved decisive. The properly filed grouping election and contemporaneous time logs withstood scrutiny, preserving $210,000 in claimed deductions with no adjustments.
A technology executive earning $380,000 qualified their spouse for REPS while simultaneously acquiring two rental properties. Cost segregation studies paired with 100% bonus depreciation generated $540,000 in first-year deductions.
A nurse practitioner with three long-term rentals transitioned to part-time clinical work and full-time property management, meeting the REPS tests and deducting $195,000 in rental losses against remaining W-2 income for a $78,000 tax reduction.
A client actively developing two residential projects counted development hours, including permitting, contractor oversight, and construction management, toward the 750-hour real estate professional test. This strategy unlocked $280,000 in passive losses from stabilized rental properties.
A business owner with $750,000 in S-Corp income and ten rental properties worked with our team to restructure management responsibilities, qualifying for REPS and converting $380,000 in previously passive losses to deductible status.
A client managing both short-term and long-term rentals used the grouping election to combine all fifteen properties into one activity, reducing the documentation burden and easily demonstrating material participation for a $165,000 tax benefit.
After five years of accumulating suspended passive losses totaling $620,000, the client's spouse qualified for REPS. Our team structured the release of these carryforward losses over two tax years, generating combined savings of $242,000.
A software engineer reduced their corporate role to 20 hours per week while dedicating 30 hours weekly to real estate management. This transition satisfied both the 750-hour test and the more-than-half requirement, allowing $88,000 in rental losses to offset remaining income.
A general partner managing a real estate investment fund counted fund management, deal sourcing, and asset management hours toward the REPS tests. With over 1,400 documented hours, the partner offset $510,000 in fund allocation losses against personal income.
Schedule a free consultation with our team to evaluate your real estate activities and determine whether Real Estate Professional Status could reduce your tax burden.
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