Getting into MultiFAmily or Commercial and meeting REPS requirement

Hello. Want to check with the Tax consultant team there that my wife and I plan to buy a small multifamily unit or commercial real estate ( like a small strip mall). My wife ( and I) will be meeting the material participation of 750 hours (combined) in the year and since she has no other job she can be qualify to get REP status. That way we can get bonus deprecation and get a Tax break on my high W2 income. Question to tax team is that the 750 hours has to be maintained in the same year the property is purchased ? Or can I purchase the property sometime in 2026 and then she can start meeting the 750 hours in 2027 and we get the cost segregation study in 2027 and get the tax break for 2027 tax year. Thanks.

@Ryan Bakke, CPA

@Mason Kimball, CPA

@Kevin Medina, CPA, MBA

1 comment