About REP Status

A cost segregation study is the easy part. It is engineering: reclassify the components of a building into shorter depreciation lives, accelerate the deductions, produce a defensible report. That work is finished before the return is filed and it rarely goes wrong.

What goes wrong is the hours. A study generates a large paper loss, and whether that loss can offset ordinary income depends entirely on whether the activity is passive — which depends on hours the taxpayer was supposed to be logging all year and usually was not. When these claims fail under examination, they overwhelmingly fail on documentation rather than on the underlying law.

So the deduction is decided by a time log, and almost nobody keeps one properly. That is the gap this software fills.

Tax software that is wrong in the taxpayer's favour is worse than no software, because it produces confident verdicts people file on. We take that seriously:

• Both prongs of IRC Section 469(c)(7)(B) are tested, not just the 750 hours
• Thresholds are evaluated as "more than," the way the regulations are written, against unrounded hours
• Short-term rentals are treated as what they are — not rental activities, and therefore not eligible for the grouping election
• Spouse hours pool for material participation; managing-partner hours never do, and count against you on the 100-hour test

When we find something wrong, we correct it and say so rather than quietly shipping a fix.

REP Status is documentation software. It is not a tax advisor, it does not prepare or file returns, and nothing on this site is tax advice. It shows you where you stand against the tests and produces a record your CPA can work from. The filing decisions are between you and your tax professional.

Questions about the software, billing, or which strategy applies to your properties: info@repstatus.io.

For cost segregation studies, Apex Reserve Group is at apexreservegroup.com.