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REP SERVICES

Real Estate Professional (REP) Tax Program for Entrepreneurs

Program for Entrepreneurs Qualify for REP status and save $30K-$100K annually by deducting rental property losses against your active business income. Full 750-hour tracking, documentation, and property management support.
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Typical Tax Savings Example

$2M business owner with 3 rental properties generating $60K in depreciation and losses. Effective tax rate: 40% (federal + state + FICA). Annual tax savings with REP status: $24K. Over 10 years: $240K saved.

What is Real Estate Professional Status?

Real Estate Professional status is an IRS classification that allows business owners and entrepreneurs to deduct rental property losses against their active business income. Without REP status, rental losses are considered “passive” and can only offset other passive income, not your W2 or business income.
With REP status, those passive losses become non-passive, meaning you can deduct them against your active income. For most entrepreneurs with rental properties, this saves $30K-$100K+ annually in taxes

IRS Requirements for REP Status

The IRS has strict requirements to qualify as a Real Estate Professional. You must meet all three requirements:

750+ Hours Per Year

You must spend at least 750 hours per year in “real property trades or businesses” such as property management, leasing, development, construction, or real estate operations.

More Than 50% of Working Time

Real estate activities must represent more than 50% of your total working time during the year. This is the requirement that trips up most entrepreneurs who have full-time businesses.

Material Participation

You must “materially participate” in your rental activities based on IRS tests. This means regular, continuous, and substantial involvement—not just passive ownership.

Documentation Requirements

The IRS requires contemporaneous time logs showing dates, hours, and specific activities. You can’t estimate hours in April when filing taxes, documentation must be created in real-time throughout the year. Poor documentation is the #1 reason REP status gets denied in audits.
We provide a complete time tracking system, help you document qualifying activities, and maintain audit-proof records for IRS compliance.
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REP Program Pricing & Services

We offer two program levels depending on whether you need just qualification strategy or full property management services to hit the 750-hour requirement

REP Basic

$500/month

For entrepreneurs who can achieve 750 hours through their own real estate activities and need strategic guidance and tracking support.
  • REP Status Qualification Strategy
  • Time Tracking System Setup
  • Activity Documentation & Audit Trail
  • Monthly Progress Check-ins
  • Annual IRS Compliance Support
  • Tax Optimization Planning
  • Entity Structuring for Properties
  • Material Participation Documentation

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Which program is right for you? If you actively manage your properties and spend significant time on real estate activities, REP Basic provides the strategy and tracking. If you’re too busy running your business to hit 750 hours, REP with Property Management handles it for you, and those management hours count as YOUR hours for IRS purposes.

How Much Can REP Status Save You?

Tax savings depend on your rental property depreciation, losses, and effective tax rate. Here’s how the math works:

Documentation Requirements

Situation: Entrepreneur with $3M operating business and 4 rental properties generating $85K in annual depreciation and expenses.

$85K

Annual Rental Losses

42%

Effective Tax Rate

$35,700

How far ahead we plan

12 months

ROI Payback Period

Result: With REP status qualification, they saved $35,700 annually. The REP program ($6,000/year for REP Basic) paid for itself in 2 months. Over 10 years, they’ll save $357K in taxes, enough to buy another rental property outright.

Tax Savings by Business Income Level​

$500K-$1M business income
$15K-$30K annual savings
$30K-$60K annual savings
$50K-$80K annual savings
$80K-$150K+ annual savings

The bigger your business income and the more rental properties you have, the more you save. Most clients with 3+ rental properties save $30K-$100Kannually once they qualify for REP status.

How Much Can REP Status Save You?

Tax savings depend on your rental property depreciation, losses, and effective tax rate. Here’s how the math works:

The 750 Hour Requirement: How We Help You Qualify

The 750-hour requirement is the biggest challenge for busy entrepreneurs. You need 750 hours in “real property trades or businesses”—and it must be more than 50% of your working time. Here’s what counts and how we help you qualify.

What Activities Count Toward 750 Hours?

The IRS allows these activities to count toward your 750 hours:
  • Property Management
  • Tenant Relations & Screening
  • Maintenance Coordination
  • Property Inspections
  • Leasing Activities
  • Bookkeeping for Properties
  • Renovation Oversight
  • Property Research & Analysis
  • Construction Management
  • Vendor Coordination
  • Lease Negotiations
  • Market Research
What DOESN'T Count?
These activities do NOT count toward your 750 hours:
Passive investing (just collecting rent checks)
Time spent as an investor only (no active management)
Financial planning for properties
General business strategy (unless real estate specific)
Time spent learning about real estate (education)
We provide a complete time tracking system that makes documentation easy:
Mobile app: Log hours on the go with date, duration, and activity description
Pre-categorized activities: Select from IRS-approved activity categories

Automatic totals: Real-time tracking shows your progress toward 750 hours

Monthly check-ins: We review your hours monthly to ensure you’re on pace

Audit-proof documentation: Contemporaneous logs that satisfy IRS requirements

Here’s the strategy most Scale-stage entrepreneurs use: Our REP with Property Management program ($3,000/month) lets us manage your properties professionally—and those hours count as YOUR hours for REP purposes.

When we manage your properties, we document every hour spent on tenant relations, maintenance coordination, inspections, and operations. The IRS allows those hours to count toward your 750-hour requirement because you’re the property owner directing the management activity.

With 4-6 properties under management, hitting 750 hours is virtually guaranteed. This is how busy entrepreneurs with $3M-$10M businesses qualify for REP status while focusing on running their operating companies.

Who Should Pursue REP Status?

REP status isn’t for everyone. Here’s who benefits most from our program:

Entrepreneurs at $1M+ Revenue

You need significant active business income to make the tax savings worthwhile. Under $500K revenue, the savings typically don’t justify the effort.

Business Owners with Rental Properties

You own 2+ rental properties generating depreciation and/or losses that you currently can’t deduct against your business income.

High W2 or Business Income

You have W2 income or business profits in the $200K-$2M+ range and are in a high tax bracket (32-37% federal + state).

Currently Unable to Deduct Rental Losses

Your rental properties generate losses, but you can’t deduct them because they’re passive. REP status unlocks those deductions.

Growth and Scale Stage Businesses

You’re at $1M-$10M revenue with stable operations. Foundation stage entrepreneurs typically don’t have time for real estate yet.

Long-Term Real Estate Investors

You’re committed to holding rental properties for 5+ years. REP status pays off over time through compound tax savings.

Not sure if REP status makes sense for you? Schedule a consultation and we’ll review your business income, rental properties, and tax situation to determine if you’re a good candidate.

How Our REP Program Works

IDD Program is designed for businesses at specific inflection points where investor or buyer due diligence is imminent or on the horizon:

Ongoing Partnership

REP status must be maintained annually. We continue tracking, documentation, and compliance support year after year to protect your tax savings.

Year-End Compliance

At year-end, we compile your documentation, verify you’ve met all IRS requirements (750 hours, 50% rule, material participation), and support your tax filing.

Monthly Monitoring

Monthly check-ins to review your hours, ensure you’re on pace for 750+ hours, and adjust activities as needed. We track your progress and catch issues early.

Time Tracking Setup

We set up your time tracking system, train you on proper documentation, and establish your activity categories based on your properties and situation.

Strategy Development

We create your personalized REP qualification strategy: which activities to track, how to structure your time, and whether you need REP Basic or REP with Property Management.

REP Qualification Assessment

We review your business income, rental properties, current tax situation, and time availability to determine if REP status is achievable and worthwhile for you.

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Timeline Expectations

Start in January:
You need 750 hours throughout the calendar year, so start January 1st for best results
Log hours weekly, review monthly with our team
June assessment ensures you’re on pace
December review and final documentation
REP status claimed on your annual tax return with full documentation attached

Common REP Qualification Mistakes

We see these costly mistakes when entrepreneurs try to qualify for REP status on their own:

GUESSING HOURS IN APRIL
The mistake: Entrepreneurs at $750K-$1M revenue still doing their own books, spending 10-15 hours monthly on data entry.
Check The Fix

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NOT TRACKING TIME PROPERLY
We create your personalized REP qualification strategy: which activities to track, how to structure your time, and whether you need REP Basic or REP with Property Management.

Check The Fix

Go Back
COUNTING WRONG ACTIVITIES
We set up your time tracking system, train you on proper documentation, and establish your activity categories based on your properties and situation.

Check The Fix

Go Back
MISSING THE 50% THRESHOLD
Hitting 750 hours but forgetting that real estate must be >50% of total working time. If you work 2,000 hours in your business, you need 1,001+ hours in real estate.

Check The Fix

Go Back
NOT STRUCTURING ENTITIES CORRECTLY
Wrong entity structure can disqualify you from REP benefits. Properties in the wrong entity or business structure can create problems. We optimize entity setup upfront.

Check The Fix

Go Back
STARTING TOO LATE IN THE YEAR
Trying to qualify starting in June or July. You need the full year to accumulate 750 hours properly. Starting late = falling short or having to pad hours (audit risk).
Check The Fix
Go Back
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Frequently Asked Questions About REP Status

What is Real Estate Professional status?
Real Estate Professional status is an IRS classification that allows business owners and entrepreneurs to deduct rental property losses against their active business income. To qualify, you must spend 750+ hours in real property businesses and it must be more than 50% of your working time.
Most entrepreneurs we work with save $30K-$100K annually once they qualify for REP status. The exact savings depends on your rental property depreciation, losses, and your effective tax rate. A $2M business owner with 3 rental properties typically saves $60K-$80K per year.
You must spend at least 750 hours per year in “real property trades or businesses” like property management, leasing, development, or construction. This must also be more than 50% of all your working time. We help you track and document these hours correctly.
You need contemporaneous time logs showing dates, hours, and activities. We provide a time tracking system and help you document qualifying activities. The IRS is strict about this, you can’t just estimate in April. Documentation must be created in real-time.
Property management, tenant relations, maintenance coordination, property inspections, leasing activities, bookkeeping for properties, renovation oversight, property research, and construction management. Passive investing activities don’t count. We help you structure activities that qualify.
No. REP status is available to anyone who materially participates in real property businesses for 750+ hours. Business owners who also manage rental properties are perfect candidates. You don’t need a real estate license.
REP Basic ($500/month) helps you qualify for REP status through strategy, time tracking, and documentation. REP with Property Management ($3,000/month) includes full property management services, which themselves count toward your 750 hours.
Yes, if real estate activities represent more than 50% of your working time. This is achievable if you work with our property management team, those hours count as your hours. Many Scale-stage entrepreneurs qualify this way.
Start in January of the year you want to qualify. You need 750 hours throughout the year, and you must track them contemporaneously. If you’re at $1M+ revenue with 2+ rental properties, you should explore REP status now.
If you fall short, you won’t qualify for REP status that year. That’s why we provide monthly tracking check-ins to ensure you stay on pace. With our property management option, hitting 750 hours is almost guaranteed.
More questions? Schedule a REP qualification consultation

Ready to Save $30K-$100K Annually in Taxes?

Most entrepreneurs with rental properties are leaving tens of thousands on the table by not qualifying for REP status. The program pays for itself in 2-3 months through tax savings.

Schedule a free consultation to discuss your business income, rental properties, and whether REP status makes sense for you.

Schedule REP Qualification Call
See Program Pricing
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