All Forum Posts by: Kathleen Rogers

Because he is a W2 employee and, I assume, he is not one of the company owners. It does not matter that his job is in real estate, it is a W2 job and therefore does not count.

Not bad news for you however, because you do not need REPS with STRs.

Thanks for clarifying; he is both W-2 and a K1 partner at 5% so I believe he does qualify for REPS. I realize in the STR discussion it doesn't matter but it may apply in other situations.

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Quote from @Michael Plaks:

Quote from @Kathleen Rogers:

My husband works for a commercial developer (W-2) and is a small owner (K1) so our understanding is that he qualifies for REPS. We're looking at buying an STR to self-manage but with rates and prices where they are, the cash flow projections are dismal. However, I think, with REPS, we can deduct the expenses and depreciation against his W-2/K1 income which make the overall picture look appealing. Am I thinking of this the wrong way?

Yes, you're missing important pieces.

First, as already pointed out on this thread, REPS is unrelated to STR. Your husband does not qualify for REPS anyway, but you do not need REPS to benefit from the so-called STR loophole.

More importantly, STRs typically create large tax losses in the first year only.

Most importantly, taxes are never a good reason to choose a poorly performing investment, IMHO.

Read this post: https://www.biggerpockets.com/forums/51/topics/1122635-the-s...

Can you explain why he doesn't qualify for REPS? A casual conversation with another CPA told us that he is so I'm not sure what I've shared that tells you he doesn't qualify?

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Clarification question on my part: to all of those who answered, does it change the answer if the W-2 is in the real estate/construction field?

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All Forum Posts by: Kathleen Rogers

Kathleen Rogers has started 1 posts and replied 4 times.

Post: Could REPS make tax savings more valuable than cash flow?

Post: Could REPS make tax savings more valuable than cash flow?

Post: Could REPS make tax savings more valuable than cash flow?

Post: Real estate professional status