395. Debunking 5 Material Participation Myths Real Estate Investors Keep Getting Wrong

Material participation is one of the most important and misunderstood tax rules for real estate investors. In this episode of the Tax Smart REI Podcast, Tom and Nate debunk five common myths involving Real Estate Professional Status (REPS), short-term rentals, the 100-hour test, property managers, equipment rentals, and partnerships. They also explain when a spouse’s hours count toward material participation, why those hours cannot be combined to meet the 750-hour REPS requirement, and what investors should know about Deferred Sales Trusts (DSTs). If you’re using real estate losses as part of your tax strategy, this episode covers the material participation rules and misconceptions you need to understand. Request a consultation from Hall CPA at go.therealestatecpa.com/taxsmart Register for FREE access to the 2026 Hall CPA Tax Strategy Summit: www.taxandlegalsummit.com/2026signup Join the Hall CPA Team: go.therealestatecpa.com/team Submit your question for Tom & Nathan: go.therealestatecpa.com/question The Tax Smart Real Estate Investors podcast is for general information purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Information on the podcast may not constitute the most up-to-date legal or other information. No reader, user, or listener of this podcast should act or refrain from acting on the basis of information on this podcast without first seeking legal and tax advice from counsel in the relevant jurisdiction. Only your individual attorney and tax advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this podcast or any of the links or resources contained or mentioned within the podcast show and show notes do not create a relationship between the reader, user, or listener and podcast hosts, contributors, or guests. Any mention of third-party vendors, products, or services does not constitute an endorsement or recommendation. You should conduct your own due diligence before engaging with any vendor.