Free Tracker + Worksheet

REPS Hours Tracker + Cut-Back Math

Know whether you qualify for Real Estate Professional Status, and be able to prove it. The contemporaneous hours tracker, the cut-back math that shows you the trade, and the license myth that trips up half the doctors we meet.

Read this first. We are physicians and investors, not accountants, attorneys, or financial advisors. This is education, not tax advice. Everything here is meant to make you a sharper client of your own CPA. Run your specific situation past them before you file.

The question we get about REPS isn't really about audits. It's "do I actually qualify, and can I show it?"

That's the right question.

Qualifying and documenting is the whole job. Not fear. You keep the log for two reasons: to know for yourself that you're clearing the tests, and to have the record ready if anyone ever asks. As Kenji tells people: the documentation is for yourself, and if you're audited. If you're not audited, nobody's ever going to see it. So you build the habit once and stop worrying about it.

REPS is a real, legal, powerful benefit. The doctors who claim it cleanly are the ones who wrote their hours down as they went, and who understood the tests before they started. This kit hands you both: the tracker, and the math that tells you whether the door is even open for your household.

The Two Hour Tests, Plainly

To claim Real Estate Professional Status, you have to clear both hour tests, and then materially participate. There's no partial credit.

1. The 750-hour test. You spend more than 750 hours in the year on real estate activities you're personally involved in.

2. The more-than-half test. You spend more time on real estate than on every other trade or business combined, including your clinical work.

3. Material participation, per property. You materially participate in each rental, or you file a grouping election that combines your properties so you meet the participation test across the whole portfolio instead of one door at a time.

The math most doctors miss: if you work full time as a clinician, you cannot pass test #2 on your own hours. A 40-hour clinical week is over 2,000 hours a year, and you'd need more than that in real estate on top of it. This is exactly why two doors exist: one spouse qualifies for REPS while the other keeps the W-2, or the physician cuts back clinical hours enough to flip the more-than-half test. The cut-back math below shows you what that trade actually looks like.

Tool 1: The Contemporaneous Hours Tracker

This is the tracker. Six columns, one row every time you do real estate work. Fill it in the same week, and by December you have the contemporaneous record that proves you cleared the tests. The tax court has a word for the log that holds up: contemporaneous. Written as you went, not rebuilt from memory in March.

Date	Property	Category	What you did	Hours	Evidence
2026-03-04	412 Pine Ave, Spokane	Acquisition	Toured the property, walked all five units with the agent	2.5	Photos + agent email 3/4
2026-03-09	412 Pine Ave, Spokane	Acquisition	Read the inspection report, call with lender on financing terms	1.75	Inspection PDF + call log
2026-04-02	88 Maple Ct, Dallas (STR)	Operations	Built the cleaning schedule, texted three vendors for quotes	2.0	Vendor texts + booking calendar
2026-04-18	88 Maple Ct, Dallas (STR)	Management	Screened a tenant application, ran the background check, signed lease	3.0	Signed lease + screening report
2026-05-06	Portfolio	Education (limited)	Course module on material participation	1.0	Completion receipt (see note)

Two things to log honestly. Count operating work you actually did: showings, repairs, tenant screening, vendor calls, the bookkeeping you personally handled. Doing, not watching. And keep education hours in their own "limited" category. Learning-the-ropes time generally does not count toward your 750, so never lean on it to clear the threshold. Your real hours come from operating the properties.

↓ Download the CSV tracker template

Tool 2: The Cut-Back Math Worksheet

If neither spouse can log the hours, there's still a door: cut back your own clinical hours enough to pass the more-than-half test. It sounds like a pay cut. Run the math and it usually isn't.

Here's the trade Kenji walks doctors through: the difference between full-time and half-time is often about one week a month. And the cashflow from your rentals plus the tax savings from REPS can make up most or all of the income you gave up. That's a trade, not a pay cut.

Worked example (illustrative numbers, plug in your own)

Line	Full-time	Cut back to half-time
Clinical W-2 income	$400,000	$220,000
Clinical time given back	n/a	~one week a month
Income given up	n/a	−$180,000
Rental cashflow added	n/a	+$60,000
Tax saved via REPS + depreciation	n/a	+$120,000
Net vs. full-time	baseline	roughly even, plus a week a month back

Every figure above is a placeholder to show the shape of the trade, not a promise. VERIFY all example figures with tax team before publication. Your marginal rate, property, and hours change the answer. The point is the pattern Kenji repeats on calls: do the math on cutting back, and the cashflow plus the tax savings often make up the lost income.

Tool-logic TODO. This worksheet ships as a worked example. The interactive version, where a doctor types in their own clinical income, target cutback, property price, and marginal rate and the page computes the net, is the same calculation family as the REPS Savings Estimator and belongs to the tool-logic pass. Wiring TBD

The License Myth (kill this one flat)

Bad CPA advice sends doctors down this path constantly, so let's end it here.

The myth

"You need a real estate license to claim REPS"

You do not. Real Estate Professional Status is about hours and material participation in real property trades. It has nothing to do with holding a salesperson's or broker's license. When a doctor tells us their accountant said to go sit the real estate exam, that's the accountant misreading the rule.

Getting a license to "qualify" is worse than useless. It runs roughly $15K a year in brokerage fees plus continuing-education hours VERIFY license cost figure, and as Kenji puts it, you never represent yourself anyway. You wouldn't go to court without a lawyer. A license buys you cost and CE hours, not REPS. Skip it, log your hours, and let the tests do the qualifying.

Four Rules For Keeping It Clean

The tracker is easy. Keeping it honestly is the whole game. Four rules carry it.

Log as you go, not in March. A note written the day you did the work is contemporaneous. A number rebuilt at tax time is a guess an examiner gets to reject.

Specific beats generic. "Screened tenant, ran background check, signed lease" beats "worked on rental." The specific entry sounds like a person who was there.

When in doubt, don't count it. A smaller number you can defend beats a bigger one you can't. Padded hours put your real hours under suspicion too.

Pair every big entry with evidence. Email, photo, invoice, signed document. The entry says what you did. The evidence proves you did it.

None of this is hard. It's a habit, kept one week at a time. Start the tracker the day you start looking at your first property, and by the time anyone asks, you'll already have the answer.

— Leti & Kenji

Whenever you're ready, 3 ways we can help

Curious what real estate could do to your tax bill? Run the REPS Savings Estimator. Two minutes, and you'll have a number. Run it →
Not sure where you'd fit this into an already-full life? Take the Which Path Fits Your Life quiz and see your fastest path. Take the quiz →
Want to talk it through with a real person? Reply "TALK" to any of our emails and someone on our team (a real one, not a bot) will reach out.

Semi-Retired MD provides education, not tax, legal, or investment advice. Run everything here past your own licensed professionals. Draft prepared 2026-07-06 for internal review; all numbers marked VERIFY must be confirmed before publication.