Real Estate Professional Status (REPS) allows qualifying investors to treat rental losses as non-passive, unlocking the ability to offset W-2 or business income. This guide explains the 750-hour rule, the >50% test, and the importance of material participation and grouping elections. With the return of 100% bonus depreciation, REPS has become one of the most powerful tax strategies in 2026 for high-income earners seeking to reduce their overall tax burden.