This means learn the relevant laws.   

I have REPS by actively and materially participating in my rental property portfolio, and also work as a real estate broker full time (1099 collecting commissions through a single member/purpose LLC) from buildings I sell.My losses from my rental properties (LLC #A) largely offset any federal and state taxes from my brokerage business (LLC #B).

The Fed has this data where it can be viewed over time in a lot of different ways. 

What is the most efficient way to set this up at the closing table so that funds can be allocated with the least tax burden on all?

Just yesterday I gave my (imo) balance view of the use of “subject to” in real property transactions, and was told by a very proficient poster in response to my post that anyone who thinks subject to transactions are ok is GARBAGE. 

I have some of Frank's materials from his billboard business days.

Here are the key details:Property Type: 5-unit mixed-use building (2 retail, 3 residential)Asking Price: $5,200,000Building Size: 4,526 SFLot Size: 1,573 SFAir Rights: 4,939 SF availableLocation: Prime area, corner lot, close to public transportation and major attractionsFinancials:Total Annual Income: ~$359,305Net Operating Income (NOI): ~$278,686Existing Debt: $4.375M @ 4.28% (assumable, maturing 1/2031)Rent Roll:Retail tenants with leases extending through 2024Residential units are all 3-bed/2-bath, free-market, with luxury finishesI’m trying to figure out how to best analyze this deal and determine if it’s worth pursuing.

My question is: between now and when I make that first investment, is there a limit or tax traps to watch out for in deducting expenses as I set up my entity structure, pay for software tools and research materials, and (most notably) travel to markets to do market research, meet with realtors, look at properties, etc.?

Btw, @Marcus Auerbach, your OP is one of the BEST posts I’ve read on BP, and I’ve been a member since 2009! 

STR loophole works under different rules, and you can read more about it here:https://www.biggerpockets.com/forums/51/topics/1122635-the-s...While REPS is clearly not recognized by CA, their conformity to the STR loophole rules is unclear.