From time to time, we hear a version of the same question: “Should I put my rental properties into an S Corporation to save on taxes?” We appreciate clients asking the question (especially before doing it!). S Corporations are often associated with tax efficiency, particularly when it comes to reducing self-employment taxes. For business owners who generate active income, that association can be valid. The issue is that rental real estate does not operate under the same rules

What actually is Real Estate Professional Status? Real Estate Professional Status (often referred to as “REPS”) is a tax designation that allows certain taxpayers to treat rental real estate losses as non-passive. Normally, rental losses are considered passive and can only offset passive income. Any excess losses are suspended and carried forward. REPS changes that. If you qualify, those losses can potentially offset ordinary income, which is where the strategy becomes very a