# REP Status by Apex Reserve Group ## What is REP Status? REP Status is a compliance suite built for real estate investors who qualify (or are working to qualify) for IRS Real Estate Professional Status (REPS). It provides real-time hour tracking, material participation documentation, and audit-ready report generation — everything investors need to claim and defend REPS on their tax returns. ## What is Real Estate Professional Status (REPS)? Real Estate Professional Status is a tax designation under IRC Section 469(c)(7) that allows qualifying real estate investors to treat rental losses as non-passive. This means rental losses can offset W-2 wages, business income, and investment income without limitation. To qualify, investors must pass the 750-hour test and the 50% test, and materially participate in their rental activities. ## Who Uses REP Status? - Real estate investors working to qualify for or maintain REPS - Spouses who manage the household's real estate portfolio - Investors with multiple rental properties needing to track hours across all properties - CPAs and tax professionals advising REPS-qualifying clients - High-income W-2 earners using REPS to offset income with rental losses - Investors pairing REPS with cost segregation for maximum tax savings ## Key Features - Real-time 750-hour test tracking with progress dashboard - 50% test monitoring against non-real-estate work hours - Material participation documentation for all 7 IRS tests - Per-property and aggregated hour tracking - Evidence upload attached to individual time entries (photos, receipts, emails) - IRS Defense Package: audit-ready reports exportable for CPA use - Contemporaneous logging with timestamps for IRS compliance - Multi-property portfolio management - Spousal hour tracking for material participation - Activity categorization mapped to IRS-qualifying categories ## REPS Qualification Requirements (2026) - 750-Hour Test: Perform more than 750 hours of services in real property trades or businesses in which you materially participate - 50% Test: More than half of all personal services performed during the year must be in real property trades or businesses - Material Participation: Must materially participate in each rental activity (or file a grouping election to aggregate) - Annual requirement: Must re-qualify every year - Spouse rules: Only one spouse needs to qualify; spouse hours cannot be combined for the 750-hour test but CAN be combined for material participation ## The 7 Material Participation Tests 1. 500-Hour Test: Participate more than 500 hours in the activity 2. Substantially All Test: Your participation constitutes substantially all participation in the activity 3. 100 Hours + More Than Anyone Else: Participate 100+ hours and more than any other individual 4. Significant Participation Activities: Multiple activities over 100 hours each, totaling 500+ combined 5. Five of Ten Prior Years: Materially participated in 5 of the last 10 years 6. Personal Service Activity (3 years): For personal service activities only 7. Facts and Circumstances: Regular, continuous, and substantial participation ## How REP Status Builds Audit Defense The IRS scrutinizes REPS claims frequently. Key court cases (Bailey v. Commissioner, Moss v. Commissioner, Pourmirzaie v. Commissioner) have denied REPS where documentation was non-contemporaneous, vague, or contradicted by financial records. REP Status solves this by requiring real-time logging, attaching evidence to entries, and generating pre-formatted audit response reports. ## Pricing - Standard Subscription: $10/month (unlimited time logging, audit trail, IRS-specific templates, automated compliance checks) - Apex Reserve Exclusive: $0/year for cost segregation customers (includes everything in Standard plus property and portfolio management, IRS Proxy Defense Package, customizable audit trail) ## Connection to Cost Segregation REPS and cost segregation are natural partners. REPS makes rental losses non-passive. Cost segregation amplifies those losses through accelerated depreciation. Combined, they create the most powerful legal tax reduction strategy for real estate investors. Apex Reserve Group also offers RapidSeg (https://www.rapidseg.com), a DIY cost segregation study platform. ## Frequently Asked Questions Q: What is the 750-hour test? A: The 750-hour test requires you to perform more than 750 hours of services per year in real property trades or businesses in which you materially participate. This is approximately 14.5 hours per week. Q: Can my spouse and I combine hours for the 750-hour test? A: No. Each spouse's hours are tracked independently for the 750-hour and 50% tests. However, both spouses' hours CAN be combined for material participation purposes. Q: What activities count toward the 750 hours? A: Qualifying activities include property management, tenant screening, lease drafting, maintenance oversight, contractor supervision, property inspections, acquisition research, renovation management, and rental bookkeeping. Non-qualifying activities include commuting, on-call time without active work, general education, and hours worked by your property manager. Q: What is the grouping election? A: The grouping election under Reg. Section 1.469-9(g) allows you to treat all rental properties as a single activity for material participation purposes. Without it, you must prove material participation in each property separately. Q: What does the IRS look for in a REPS audit? A: IRS examiners review your contemporaneous time log, 50% test documentation, material participation evidence, grouping election filing, and corroborating evidence (receipts, bank statements, emails, photos). Q: Is REPS the same as being a licensed real estate agent? A: No. REPS is a tax designation under IRC Section 469(c)(7) based on time spent in real property trades or businesses. It does not require a real estate license. ## Topics Covered on Our Blog - How to qualify for Real Estate Professional Status in 2026 - The 750-hour test: what counts and what doesn't - REPS and IRS audits: building an audit-proof file - The 7 material participation tests for real estate investors - REPS combined with cost segregation for maximum tax savings - The grouping election under IRC 469: why it's essential for multi-property investors ## Contact Website: https://www.repstatus.io Get started: https://www.repstatus.io/auth Blog: https://www.repstatus.io/blog Cost Segregation: https://www.rapidseg.com Company: Apex Reserve Group