An investor account is a repository for funds. You can transfer funds from your bank to your investor account and use those funds to invest in startups and syndicates.
You can also use the account to receive distributions when one of your investments has an exit.
You create an account when you invest in a startup or fund a syndicate.
There are no tax consequences. Your funds do not earn interest and are not considered an investment.
As an investor in the fund, we are required to send you a K-1 from the fund when it has a filing requirement. We also send the information to the IRS. Whether or not you need to file a US tax return depends on many factors. Since we are not tax advisors, we suggest that you contact a CPA or tax attorney who can give you personalized guidance.
We do not shut down SPVs or write off the investments before a bankruptcy or other official proceeding has run its full course.
Fund X neither received income nor incurred any expense during the year and therefore had no tax filing requirement. As such, no K-1s were issued for the fund.
The assets held by the funds are accounted for at their cost basis. As these funds are only passive investors, we do not mark to market. Only active dealers and traders in securities may elect the mark-to-market accounting method.
The due date for furnishing K-1s to investors is the same as the due date for filing the Fund's tax return. The initial deadline for the 2016 tax year is March 15. However, if additional time is required to file an accurate return, an extension of time to file may be granted. Once an extension has been filed, the deadline becomes September 15. By virtue of the unavailability of certain required information, this was the earliest we were able to issue the K-1s.
Under tax current law, capital gains are not taxable to foreign investors and therefore we do not withhold. However, there are provisions of FATCA (Foreign Account Tax Compliance Act) and Regulation § 1.1473-1 which state that capital gains will become a withholdable payment. Currently, this is set to be enforced starting in 2019.
As we are not tax advisors, we are not in a position to aid you in filling out the form. Please click on the links below for instructions to the forms. If your require any additional guidance, we suggest that you contact a CPA or tax attorney who is familiar with your situation and can provide you with individualized advice.