REPS Question/Advice needed

[Chuck Ward]

So reading everything online, and here, I am struggling with my own personal situation and finding it hard to believe that I and/or my wife do not qualify for this deduction. My accountant is awesome, honest, and ethical. I am meeting with her tomorrow to discuss our 2024 Taxes. Before I do, am hoping for some expert input.

I do realize that logging time seems to be very important. So while I am asking questions, I am answering a few myself- bear with me:

A few facts:

1. We own 3 Mobile Home Parks- Most are tenant owned, but some are park owned. One LLC owns all 3 of them.

2. We own 1 SFH, Long Term, in our personal name. (first one, will switch to LLC when rates drop)

3. We own under separate LLCs 1 Commercial, 2 Homes, and 1 Town Home.

4. We are currently renovating a property under another LLC that will be an STR and will be placed in-service this year

5. We own our W2 Income producing business that we both work physically daily- Mon-Fri. And our combined income, if no profit, us under $100k year.

6. We pay 1 Mgmt company to handle the Town Home. For now- that may change in 2026.

7. We manage all other properties ourselves directly. A total of 29 Rentals. Maintenance, Leasing, Advertising, Evictions and Collections, etc. Some items are handled by sub-contractors but we are always involved 100%. We even collect rent and sign leases at our retail store during the day whle we are working our "job"

So, this leads me to the next part:

1. How in the world would we not justify as REPS?  Or could we? (what am I missing?)

2. What's the best log to use?

3. Yes, I am very tired...lol

[Michael Plaks]

Quote from @Chuck Ward:

Quote from @Michael Plaks:

@Chuck Ward

This is really for your lovely CPA to explain to you tomorrow.

The crux of the matter is your hours involved in your non-RE business (#5) vs the hours managing your RE portfolio. One of you must be spending MORE hours on your RE portfolio than on your other business. If you can prove that - then that person probably passes the required REPS test.

Thanks for the response. Curious- does it always come down to the log and exceeding the w2 hours? Between the texts, emails, calls, QB entries, checks and bills, reconciliations, meetings- while I don't have a log, I do know that I am meeting/exceeding the 750 rule. I just haven't analyzed my time with the w2 job.

Two different tests, and you need to pass BOTH of them. (More than two , actually.)

1. 750 hours AND

2. more hours on RE than on any other money-producing activity

I assume you clear the 750 hrs, but you might have issues with the second test