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Real Estate Professional Status (REPS) Calculator

Check if you qualify as a Real Estate Professional under IRC 469(c)(7) to unlock unlimited rental loss deductions against W-2 income.

Hours & Activities

Per-Property Hours

hrs
hrs
hrs
Total property hours 800 hrs
REPS Status
NOT QUALIFIED
You do not currently meet the IRS requirements for Real Estate Professional Status.

Test 1: 750-Hour Test

PASS
800 / 750 hours

Test 2: More Than Half Test

FAIL
800
RE Hours
vs
2,000
W-2 Hours

Your W-2 hours (2,000) exceed RE hours. Consider reducing W-2 or increasing RE activities.

Test 3: Material Participation

PASS

Aggregating all activities under IRC 469(c)(7)(A):

800 aggregate hours

Recommendations

  • ✗ RE hours must exceed W-2 hours. Consider part-time W-2, or scale up active property management.

What Counts as RE Hours?

  • ✓ Property maintenance & repairs
  • ✓ Tenant management & communication
  • ✓ Bookkeeping & financial management
  • ✓ Property tours & showing units
  • ✓ Contractor oversight & project management
  • ✓ Legal, tax, & insurance work
  • ✓ Real estate education & market research
⚠

IRS Documentation Requirement

The IRS requires contemporaneous time logs. Reconstructed logs after year-end are less credible in an audit. Keep a daily log of activities, hours, and property addressed.

SheltrIQ automatically tracks your RE hours for REPS qualification.

Track Your REPS Hours Understand Passive Losses

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Frequently asked questions

What is the 750-hour test for Real Estate Professional Status?
To qualify as a real estate professional, you must spend more than 750 hours during the tax year in real property trades or businesses in which you materially participate. Those hours include things like managing rentals, maintenance, tenant work, and overseeing contractors. The 750-hour threshold is statutory under IRC 469(c)(7), and it is tested fresh every single year.
What is the "more than half" (50%) test?
Separately from the 750 hours, more than half of all the personal services you perform across every trade or business during the year must be in real property activities. In practice a full-time W-2 job (roughly 2,000 hours) makes this test hard to pass, because your real estate hours have to exceed your non-real-estate work hours. Both the 750-hour and 50% tests must be met in the same year.
Why does REPS let rental losses offset my W-2 income?
Rental real estate is normally treated as a passive activity, so its losses can only offset passive income. If you qualify as a real estate professional and materially participate, your rentals are no longer automatically passive, which can let those losses offset ordinary income like W-2 wages. That is what makes REPS so valuable for high earners with depreciation-driven losses.
What is material participation and why does aggregation matter?
Material participation means being involved in the operations on a regular, continuous, and substantial basis — commonly shown by 500+ hours in an activity. Without a grouping election you must meet material participation property by property, which is hard with several rentals. The IRC 469(c)(7)(A) aggregation election lets you treat all your rentals as one activity, so your combined hours count toward the test.
Is this calculator tax advice?
No — this is a screening estimate to help you see where you stand against the REPS tests, not tax advice. REPS is heavily scrutinized in audits and is tested per year, so keep contemporaneous time logs (recorded as the work happens, not reconstructed later). Consult a CPA before claiming Real Estate Professional Status on a return.