Passive Activity Rules & Real Estate Professional Status (REPS)

Team1 Nwkcommercial
Oct 28, 2025
1 min read

The IRS distinguishes between active and passive income. Rental losses are usually passive — unless you qualify as a Real Estate Professional (REP).

REP Requirements:

750+ hours per year in real estate activities.
More than 50% of your total working time in real estate.
Material participation in property management or investment.

💡 Key Takeaway: REPS converts passive losses into active ones — unlocking powerful offsets against W-2 income.

⚠️ This blog is for informational purposes only and does not constitute tax, legal, or accounting advice. Please consult your CPA for guidance specific to your situation.

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