How high-earners are using real estate and a little-known rule to slash their tax bills

Kenji Asakura and Letizia Alto are the co-creators of Semi-Retired MD.

Courtesy of Letizia Alto and Kenji Asakura

• There's a little-known IRS designation called real estate professional status, or REPS.
• It allows qualifying investors to use real estate losses to offset W-2 income.
• If you or your spouse qualifies for REPS, it can reduce or even eliminate your tax liability.

For years, Dr. Jill Green watched a large chunk of her physician's salary eaten up by taxes.