Investors investing solely in investments that receive 1099-INT should not require filing extensions as 1099-INT are provided by the end of January, well in advance of April filing deadlines. Investments such as our Alpine Notes product and other debt investments structured as series provide 1099-INTs.
Per our tax process, providing you with a Schedule K-1 form is dependent on our team receiving sponsor-level documents for each investment. In private real estate investing, it is not uncommon for investment entities to file extensions, as tax reporting for these investments can be very complicated. That being said, many of our sponsors are still able to provide their documents in a timely fashion before the April tax filing deadline. In these cases we work diligently to provide our investors tax documents without needing to file extensions.
In an effort to improve our turnaround time we have taken the following steps to improve our process:
Reach out to sponsors early and often, especially sponsors new to our platform, prior to the beginning of each tax season.
Reach out to new sponsors' tax preparers directly to communicate the prioritization of timely document deliverance.
Sending samples of K-1 forms in early January to sponsors, detailing our expectations for how forms should look and what should be included, on any K-1 form being sent back to our team.
Preparing and collecting as much investor-level data for tax forms as possible with our tax preparers at the onset of the tax season, while sponsor-level documents are being completed.
Collecting draft K-1 forms from sponsors to better prepare for filling out investor-level documents when finalized sponsor Schedule K-1s are delivered.
Many of our sponsors work with LPs that are accustomed to filing tax extensions and have traditionally operated at this cadence when it comes to the tax filing process. For our part, EquityMultiple has communicated that our expectations for tax season differ and that the timeliness of receiving sponsor-level documents is crucial should sponsors hope to continue to work with us. We urge you to contact your tax professional if you believe you may benefit from filing a tax extension when it comes to any of your investments on our platform.
EquityMultiple is unable to provide tax-related advice of any kind, and therefore, we highly encourage you to discuss possible extensions for your investments with a tax professional.
For more information, see the IRS guidelines on tax extensions and how to file.