Real Estate Professional Status (REPS)

REPS's promise of unlimited passive loss deductions collapses under its crushing requirements: 750+ hours annually in real estate and more time spent there than at your day job. The IRS wins over 60% of Tax Court challenges against REPS claims, making it riskier than Moving to Puerto Rico for Act 60 Tax Benefits's Puerto Rico Act 60 for those without ironclad documentation. Only taxpayers averaging 1,000 hours per year in qualified real estate roles can confidently pass muster, leaving 9 out of 10 applicants exposed to full tax recapture.