Reps Status (via wife) & Material Participation to offset W-2

[Alfredo Cardenas]

Hello, Anyone has experience using REPS status via their wife or husband to offset W-2?  

MY 2024 W-2 will be more than $300K and this year (2024) I married a real state agent. I have been reading a lot and educating myself on the REPS scenario for me to use the real state losses in 2024 to offset my 2024 W-2 income. I believe my wife and I pass all the tests under REPS and material participation (adding our time spend of our rental together). I understand that I can not use any prior rental looses losses to offset W-2 in 2024 ( i am using those prior year losses to offset capital gains of 3 homes i sold in this year/2024). BUT, I believe I can do a cost seg and bonus depreciation on the 3 remaining (the ones that I did not sell this year) rentals in 2024 to use those losses to offset my 2024 W-2 via REPS. Is this correct?

Questions:

1- Does the above strategy sound correct or am i am missing something? If this is right, I can save a very significant amount on taxes. 

2- what is the  estimate percentage of people with high W-2s that get audited my claiming REPS via their wife REPS status to offset W-2? Is it almost everyone? 

3- Does anyone have an example of a time log for the material participation test? 

[Alfredo Cardenas]

Hello, yes, there are all long term rentals. I keep reading and I learned that prior year passive losses "can not" be unlocked to offset current year W-2 income via REPS if me or my wife became REPS in 2024. I can use past losses to offset current year capital gains but I can not use them to offset income in 2024. I can only offset w-2 income with losses of the current year in which my wife became Real state.