You spent a decade learning
to earn. Now let's make sure
you keep what you earn.

The real estate professional election under IRC §469(c)(7) converts all real estate losses for the household from "passive" (useless against practice income) to "non-passive" (directly offsets everything). The key: only one spouse needs to qualify, and a spouse who manages the family's rental properties — and has no other full-time profession — typically qualifies.

The two-part test: The qualifying spouse must spend more than 750 hours per year in real property activities in which they materially participate, AND those hours must represent more than 50% of their total personal services for the year. For a spouse who manages properties and has no other full-time profession, both tests are achievable — but both require contemporaneous documentation.

This is not a one-time decision. Both tests must be re-satisfied every year. The IRS specifically trains examiners to request time records when they see REP status claimed. Without contemporaneous logs — maintained in real time throughout the year — the election will not survive examination. We provide the tracking template, review the logs before filing, and prepare the required statement attached to your Form 1040 each year.

A 401(k) allows $24,500 per year in 2026. For a physician earning $700,000, that is a 3.4% reduction in taxable income — barely moving the needle. A properly designed defined benefit or cash balance plan allows contributions — and immediate deductions — of $200,000 to $330,000+ per year, depending on your age and income level.

The defined benefit plan promises a specific monthly retirement benefit and funds it through annual actuarially determined contributions. The cash balance plan is a hybrid — same large deductions, but your account is credited with a fixed annual percentage, making it easier to understand and communicate to any staff who must be covered.

For physicians in their 50s with high practice income and a desire to build protected retirement wealth rapidly, this is typically the single highest-value income tax strategy available. Assets inside the plan grow completely tax-deferred, are generally creditor-protected under ERISA, and are not subject to passive activity limitations — they offset the physician's practice income directly regardless of how that income is earned.

An enrolled actuary is required by law. We coordinate the actuary relationship, review their annual certification, and prepare Form 5500 annually by July 31 — the most strictly penalized deadline in the plan's compliance calendar ($250/day for late filing).

Many physicians own their medical office building through a separate entity — a practice building, a surgery center interest, a medical office park. These properties are being depreciated over 39 years by default — roughly $25,641 per year per million dollars of depreciable basis. A cost segregation study changes this entirely.

The study identifies components that qualify for accelerated depreciation: specialty flooring, exam room fixtures, specialized electrical systems for medical equipment, IT infrastructure, parking surfaces, landscaping, and exterior lighting. Under permanent 100% bonus depreciation law, all components with a 20-year-or-less life are fully deducted in Year 1.

We conduct cost segregation studies in-house. No outsourcing to a third-party engineering firm, no additional fees, no handoff risk between the study and your tax return. The findings go directly into Form 4562 on your return — integrated by the same team that prepared the study.

For physician households where the spousal REP election is in place, the first-year cost segregation deduction is immediately available against the physician's W-2 income — not trapped as a passive loss. Without the REP election, the deductions are passive and carry forward until the property is sold. This is why the two strategies pair so powerfully.

A medical practice that is worth $800,000 today may be worth $4–$6 million at the time of a partnership buyout, a group sale, or an individual exit 10 to 15 years from now. Every year of that growth that occurs inside your taxable estate is subject to 40% estate tax at death.

Every year of that growth that occurs inside an irrevocable trust — a SLAT, an IDGT, or a dynasty trust — is permanently outside your estate. The appreciation belongs to the trust, not to you, and escapes estate tax entirely.

The optimal time to establish estate planning structures is before the practice reaches peak value. A physician who funds a SLAT with $2 million of practice equity at age 48 captures 12 to 15 years of compounding inside the trust — outside the estate — before the typical exit age. At 7% growth, $2 million becomes $5.5 million over 15 years. That $3.5 million of growth was never part of the estate and is never subject to the 40% tax.

Waiting until age 62 to begin estate planning means the practice has already grown to its peak value inside the estate — and any transfer now must use the full current value of lifetime exemption rather than the lower value from years earlier. The cost of waiting is measured in millions.

Most physicians operate through some form of pass-through entity — an S corporation, a professional corporation, a partnership with the medical group. The structure of that entity determines how much self-employment and Medicare surtax you pay, how much of your income qualifies for the QBI deduction, and how the income flows to your personal return.

S corporation reasonable compensation: The S corporation structure allows physicians to pay themselves a "reasonable salary" and take additional income as distributions — which are not subject to self-employment tax or the additional 0.9% Medicare surtax. The "reasonable compensation" analysis is the key — too low and the IRS challenges it, too high and you lose the self-employment tax benefit. We model the optimal compensation level each year based on your specialty, practice income, and current guidance.

QBI and SSTB classification: Most physician specialties are "specified service businesses" — which phases out the QBI deduction above certain income thresholds ($201,750 single / $403,500 married in 2026). However, ancillary income streams — real estate rental income, management company income, investment income — may still qualify for the QBI deduction even when the primary medical practice does not. Properly structuring these income streams can preserve hundreds of thousands of dollars of QBI deduction eligibility.

Multiple entity coordination: Physicians with hospital employment, private practice income, real estate income, and investment income have multiple overlapping income streams. Each must be analyzed for QBI eligibility, passive activity classification, self-employment exposure, and FICA treatment. We coordinate across every income stream — ensuring nothing falls through the gaps between advisors.