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Quote from: couchfi on November 23, 2020, 11:34:34 PM
3% after paying 4.5k on a 250k loan. Haven't seen investment property rates below 4% before, so pulled the trigger and did it.
Quote from: stingray on December 17, 2020, 05:47:54 AM
You do not need to wait to declare your investment(s) worthless. In some cases (see below), you may even lose your ability to claim a loss if you wait. The answers to your questions are contained in IRS instructions. The short answer is, be reasonable and document the reason for your decision. The even shorter answer is, and I say this as a friend: if you invest in vehicles like RS you should have an accountant who can handle questions like this and defend you in case of an IRS audit.
For tax purposes, for an untraded private asset, you can use your own reasonable method to determine when your investment becomes worthless. You certainly do not have to defer to RS. In my view, the factual circumstances make it reasonable to declare some of these RS investments worthless, even if RS has not yet admitted it.
If your investment is a partnership (LLC) interest, you can declare it worthless and take a (long-term) capital loss.
If you have not had partnership liabilities allocated to you (check your last Form K-1), in many cases you can affirmatively abandon your partnership interest and take a loss against ordinary income. This approach would be better for you, if you determine that you are allowed to take it. Here you must notify the LLC and document very carefully.
If your investment is in the form a promissory note, the tax treatment is different. A failed investment is treated as a bad debt. If it is a personal investment, it must become 100% worthless, at which point you can deduct it as a long-term capital loss. It is up to you to determine when it becomes worthless. Note: the IRS states that you MUST claim the loss in the year the debt becomes worthless. If you wait until a subsequent year, the IRS could deny the loss.
Finally, a philosophical word about income tax: when you invest in complicated private deals, the application of tax law and regulation to real-world situations is never 100% clear. You have to do your best to comply, but there will often be gray areas that require judgment. Consult an accountant. Bear in mind, that if you act in good faith and document your reasons, the worst that will happen is that the IRS audits you and disagrees. There is really no shame in that. It happens all the time to sophisticated investors. You will debate your position with them. If you don't prevail, you will pay the difference in tax and some interest. There may be some penalties, but you can avoid or minimize these by acting in good faith and documenting your decisions.
GOOD LUCK MY FRIEND.
Quote from: Allover on December 14, 2020, 12:06:53 PM
Some updates :
FG : Like most of you I too am wandering in the wilderness on FG. Not a lot of response from RS. Ian from the Law Firm has been responsive but that does not put any coin in my pocket. My FG investment was / is Church's Chicken in Orlando FL. How you could screw up a fast food place in the heart of one of the biggest tourist places on the planet ( pre Covid) is beyond me. It IS in a good location, there should be at least some return of principal. Maybe 50% or slightly more.
Duval Way: As I mentioned prior I spoke to one lawyer who is currently suing the developer of Duval . He was not optimistic. I tried reaching another lawyer who is ALSO currently suing the developer of Duval Way. He did not even bother to return my calls or emails. The fact that 2 different attorneys in the Bay Area where / are suing the developer of that property proves beyond any doubt that RS was writing loans with their eyes closed.
According to RS Duval Way was sold last month for well below asking price. Further more the are Millions $ in liens. The thief that these idiots gave our money to has pledged that he will pay up $300,000 in one years time. Good luck with that. I have better chance of being elected Governor of CA. IF ( unlikely) that happens I MIGHT get some pennies on my dollar. After the RS people have wet their beaks of course.
As I saw someone prior comment ; I got into this because it was supposed to be " safe" as opposed to snake oil like TESLA.
So much for that.
Make sure you tell your tax preparer about this fiasco. Get what you can against other income.
Also make sure that you tell any elected official that you know and or more importantly any law enforcement persons that you know. Regardless of jurisdiction. Its quite probably the case that only when a US Attorney or District Attorney with a guy with a gun in tow shows us up will we get any answers.
Quote from: Allover on October 24, 2020, 06:54:05 AM
An update since my last post.
I found an attorney who is currently suing the developer of the Duval Way project. He is suing him for something else. That by itself speaks volumes to the lack of due diligence shown by RS. Stated another way, they blindly invested our money with crooks.
The first lawyer sent me to another lawyer. The second attorney told me that : 1) He was not really interested in contingency.
2) That I needed to think long and hard about spending $5,000 to sue over a $10,000 loss. Further because I would so far down the food chain, behind mechanics liens etc, that I would get pennies. If that.
As such I am in a holding pattern.
If anyone has any additional comments or thoughts please share.