With the tax season coming soon, many of our accredited investors may be in the process of submitting their tax documents. Yieldstreet distributes Schedule K1, and to answer any questions investors may have about filling them out, we’ve compiled a breakdown of the form below. In this article you can find out what numbers on your Schedule K1 mean, as well as information on where you can find them in your online investment portfolio.
Part I deals with the Partnership information, which will be completed by Yieldstreet to identify the individual SPV name and tax identification number, depending on the investment opportunity that this K-1 is for.
Part II deals with the Partner, or the investor. This part contains information about the investor’s participation in the opportunity.
Capital Percentages – This section reflects your beginning and ending ownership percentage in the fund for the current tax year, which represents your committed capital over the total committed capital raised by the fund. For a detailed breakdown or if you have any questions, reach out to [email protected]
FAQ: My Ending Capital is 0%. How was this determined?
If the opportunity closed and was repaid during this tax year (by December 31, 2022), your Ending Capital will be 0%.
Beginning capital amount: This figure represents your beginning tax capital in the fund, which may vary from your beginning book capital in the fund.
Capital contributed during the year: This number will reflect how much you invested in the opportunity during the current tax year.
Current year increase (decrease): This is your current year taxable income/(loss), plus other certain items such as, tax-exempt income and non-deductible expenses.
Withdrawals and distributions: This number will be the total amount of principal and net interest distributions for the current year. You may get this number by going to the Reports section of your portfolio and adding up all distributions effective in the 2022 tax year. This amount reflects all cash payments received by you during the current taxable year.
FAQ: I have added up all distributions from my Portfolio, but my calculation does not match my K1.
On some occasions, there are distributions that were initiated prior to January 1, but did not hit an investor’s bank account until after January 1, and thus would not have been included in this tax year. All Yieldstreet transaction pages have a “Cleared Date” on the Transaction tab in your Portfolio. To get the number reflected on your K-1, add up all the transactions that occurred with a clear date during 2022.
Ending capital account: This number can be calculated by adding up all the above, minus the distributions. It will be carried over into your followingyour following year K-1 and will be reflected as the Beginning Capital Account.
Interest income: This is your pro-rate share of interest earned by the fund for the current year.
Interest Expense: In some cases, earlier Yieldstreet opportunities which were pre-funded by Yieldstreet, accumulated interest from the opportunity while it was being filled by investors. Yieldstreet effectively accrued that interest. When the opportunity closes, Yieldstreet passes on that interest to the opportunity’s investors in the form of an investment interest expense deduction (Box 13H).
Other deductions: There are other expenses incurred by the fund which need to flow through to the investors of the fund. These expenses are reflected as “other deductions”. An example of this is certain portfolio deductions (i.e., management fee expenses) in Box 13W on the K-1.
In brief, the Schedule K1 (Form 1065) is a tax document. It breaks down your share of a partnership’s income, deductions, and credits. This form is essential for filing personal taxes.
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