Benefits of REPS if I'm not doing a Cost-segregation

[Chris Burcher]

Hi,

I have been REPS the past 3 years. This year (tax year 2021) we did well because we purchased a property and did a cost segregation. The other two years I didn't see a financial benefit from doing reps. Maybe I 'did it wrong', plus we had weak CPAs in prior years but have found a great one now. We did not do meaningful cost segregations in those previous years.

I haven't asked my CPA yet, but wanted to get some perspectives form experience here about other benefits of reps beyond the tax savings via cost segregation and bonus depreciation.

I realize there might be some minor write-off capacity that is increased with REPS, but would this be meaningful?

Is it worth getting REPS for other reasons? Are there non-financial benefits? 

What am I missing? 

The life situations that my MD wife is considering 'retirement' so there would be little W2 income to shelter, plus I would probably go back to work at least part time making REPS less palatable. 

Thanks, everyone!

Chris

[Ashish Acharya]

You avoid NIIT tax with REPS status if done correctly.