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Started by Sam, November 07, 2018, 11:29:29 AM
Quote from: stingray on December 17, 2020, 05:47:54 AM@mpspringer: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.https://www.cpajournal.com/2016/10/01/partnership-abandonment/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: sdnerd on February 04, 2021, 10:00:35 AMHas anyone received or seen any updates in re: to the FG properties?Feels like it's been a few months of radio silence.
Quote from: berkel on February 05, 2021, 05:12:02 AMI hope you guys have some luck, regarding the American Family Care deal in Florida my update said it's a tier 3 asset and they seem to have lost the original loan documents. They are trying to find them in storage, but the fees haven't been paid. So they may have lost the original loan documents required to do the deal with the other company? Awesome.It's also awesome that my Karma is down to -27, that's a lot of bad karma!!
Quote from: mspringer on February 05, 2021, 04:37:12 AMQuote from: sdnerd on February 04, 2021, 10:00:35 AMHas anyone received or seen any updates in re: to the FG properties?Feels like it's been a few months of radio silence.Ironic because we just got one today saying they are working with a company who may buy into some, but not all, of the FQ investments. I wonder if we ask for an update on this board, if we are more likely to get one, as it seems that's the only time I see it?
Quote from: rs_thoughts on March 01, 2021, 08:27:39 PMI find it sneaky that I did not get some email from Realtyshares indicating there was an update. Instead, when I was checking to see if there were some tax documents I needed, I saw there was a more recent notification near the end of February on a pdf file. I think they turned off the email setting to notify people. It said:"IRM has been able to obtain the original Franchise Growth loan documents from a storage locationin California. The files are safely in our offices in Dallas and are being reviewed by the legal team.Upon first glance, the documents appear to be in perfect condition and properly labeled. We expectthe transaction for the sale of all portfolio properties to continue and hope to share more informationwith you shortly.The sale of the Franchise Growth notes is being done on a case by case basis, and updates withexpected returns will be sent to investors in each project, individually, as they become available"Congratulations realtyshares. You found the loan docs.....Go GME!
Quote from: barnold24 on April 07, 2021, 04:23:01 PMHas anyone received any tax documents or updates regarding timing of the K-1's?
Quote from: DigitalNomad on April 07, 2021, 04:45:08 PMQuote from: barnold24 on April 07, 2021, 04:23:01 PMHas anyone received any tax documents or updates regarding timing of the K-1's?No, I haven't received any of my 4 K-1s.
Quote from: cgblack on June 11, 2021, 12:46:07 PMA disappointing update on 1 Sand and Sea:=====IRM currently classifies this investment as a Tier 3 asset. Distributions from thisinvestment have not been distributed in accordance with the original business plan.Since the last update, the house did sell. It was previously mentioned the closing wasdelayed primarily due to the actions of one of the Managing Members (MM). The MMwho was trying to cause the delay demanded he get back his equity investment beforehe would consent to the sale of the house. The active MM who completed the housesaid the other MM decided not to contest the sale.The house sold for $9,000,000 and after $450,000 of real estate commissions andapproximately $190,000 of other selling costs, the net sale price was $8,360,000. TheMM reported that the total acquisition, construction and financing cost was $10,528,196,so the loss was $2,168,196.The MM who has been involved in completing the house is a CPA. We have requestedmuch more detail than just a summary of the expenses. We will continue to work onobtaining the detailed information to determine if the expenses were legitimate andthere was an actual loss. We are also taking steps to determine if there is any recourseagainst the MMs for the apparent loss on this investment.======This is outrageous. Here is the original listing for this investment:======The total investment, including purchase price, hard and soft costs, and closing costs is approximately $5,572,642. The senior debt will contribute approximately 47.5% of project costs, while RealtyShares investors will contribute approximately 35.9%, leaving the sponsor with a 16.5% contribution to total project cost. The estimated sales price upon completion is $6,600,000, or $3,185/sf (1). However, in order for the Sponsor to return the investors' equity, preferred return, and annualized exit fee upon sale, the sales price need only be $5,112,903, or $2,468/sf. ======Suddenly a net sales price of $8,360,000 comes out as a loss. Something stinks about this one!