REPS Qualification Strategies for 2025 | Real Estate Professional Status CPA Guide
Why REPS Still Matters
For high-income earners, Real Estate Professional Status (REPS) can turn passive losses into active ones — allowing real estate deductions to offset W-2 or business income. But the IRS is watching closely.
REPS Qualification 101
You must:
Spend 750+ hours per year in real estate trades or businesses you materially participate in.
Spend more than half of your total working hours in those activities.
The Spouse Advantage
If you’re married, only one spouse needs to qualify for REPS. That opens the door for full passive loss deductions even if the other spouse has high W-2 income.
How to Build an Audit-Proof Log
Track hours daily.
Describe specific, measurable activities (“reviewed rehab bids,” not “research”).
Use timestamped tools like QuickBooks Time.
Pairing REPS with Cost Seg
When you qualify for REPS, cost segregation losses become active, meaning they can offset other income. This is where the big savings happen.
Common Pitfalls
Counting hours for properties managed by others.
Relying on memory instead of logs.
CPAs who don’t specialize in investor strategies.
Internal Link Prompt: Learn more about our [Real Estate Tax Planning → /services/tax-planning]
CTA:
Want to unlock six-figure deductions the right way?
Book your Strategic Tax Blueprint Session with Strategic Planning Advisors — and we’ll design a REPS strategy that withstands audit scrutiny.
About the Author:
Frank Alcini, CPA, founder of Strategic Planning Advisors, combines real-world investing experience with advanced tax strategies for high-income professionals and real estate investors.
