The 750 Club
Real Estate Professional Time Tracking App
Overview
The IRS allows professional real estate investors the ability to obtain certain tax benefits by obtaining Real Estate Professional Status (REPS), which is a classification recognized by the Internal Revenue Service (IRS) under the U.S. tax code. It allows individuals who meet certain criteria to be considered “real estate professionals” for tax purposes, even if real estate is not their primary occupation.
Individuals who qualify as real estate professionals, there are significant tax advantages related to rental real estate activities. These advantages primarily revolve around the ability to offset passive losses from rental activities against other forms of income, such as wages or business income. This can potentially result in a lower overall tax liability. However, proper documentation of the hours working on real estate is often required by the IRS to substantiate the tax payers claim for REPS status.
Problems being solved
Without a specialized time tracking system, most real estate investors have been relegated to creating their own custom systems using a combination of handwritten notes in a journal or electronic spreadsheets. These types of recording systems are prone to user errors, such as forgetting to log time and recording misclassifications. Additionally, they are largely impractical in terms of portability, which leads to delays in the entry of records. Furthermore, current solutions lack the proper analytics to ensure the achievement of various required milestones.”
Approach
The first step in creating the 750 product was to confirm that there was in need in the market for this type of tool. Next was understanding the IRS rules in explicit detail. This required extensive online research and conversations with CPAs to understand what the IRS rules related to achieving REPS status and what activities were considered material participation.
Research
Challenge
How can the app’s interface be designed for users to make time entries with the least amount of effort?
Wireframes
To facilitate the validation of the business and user requirements, abstract mockups called “wireframes”were created for stakeholder to review and suggest modifications
Visual Design
Visual DesignAfter the wireframes have been finalized, high fidelity visual designs can be created using a designsystem that specifies user interface elements such as colors, spacing, typography and more.
