Tax is complex and depends on your country of residence, tax status, and the specific deal structure. This article provides general guidance but always consult a qualified tax advisor.
When do tax events occur?
Annual K-1 forms: Each year, every SPV you're invested in will issue a K-1 (Schedule K-1) form that reports your share of the SPV's income, deductions, and credits, even if no cash was distributed to you. You need these for your tax filing.
Exit proceeds (distributions): When a deal exits and you receive cash or publicly traded shares, this is typically a taxable event. The gain (or loss) is calculated as:
Capital gain = Exit proceeds − Your original investment − Setup fees
Short-term vs long-term rates depend on how long you held the investment
Secondary sales: If you sell your SPV interest to another buyer, the difference between your sale price and original investment is a capital gain (or loss).
Where to find your tax documents?
All K-1 forms are uploaded to your Vault as soon as they're available (typically by March 15 of the following year). You'll receive an email notification when new tax documents are ready.
Wealt does not provide tax advice. The information above is for general awareness only. Consult a tax professional for advice specific to your situation.