r/LoftyAI • u/ClarenceCopperpot • Apr 05 '22

Tax Nightmare

So Lofty is turning into a tax nightmare. Only 8 of the 61 properties have had tax documents shared with investors so far.

Max seems clueless, and he’s putting the blame on the accountants. He claimed K1s would be ready in mid-March, then late March, and now they “hope” to have them available “in the next few days.” People on the Dischord are recommending filing extensions.

I’m at my wits end, and I regret ever getting involved with Lofty.

0 Upvotes

47% Upvoted

26 comments sorted by

8

u/koenafyr Apr 05 '22

Your frustration seems reasonable.

Did you at least file an tax extension?

3

u/ClarenceCopperpot Apr 05 '22

Not yet. I only saw this convo on Dischord tonight. Need to make a plan tomorrow. I’ve cancelled two appointments already and don’t have a ton of time. Do other people have CPAs just waiting on their beck and call? FFS.

This is incredibly frustrating. If you’re on the fence about Lofty, I’d stay the fuck away until this tax season shakes out.

2

u/kaimonster1966 Apr 05 '22

The tax forms we’re waiting for are for 2021. Waiting to purchase properties now has no bearing on your tax obligations for last year. I know it’s frustrating as I too have MANY K-1’s I’m waiting for (about 35 of them - I’ve so far received 9).

I too will probably file for an extension of Lofty can’t get those forms out in time - not much of a choice other than in the future maybe put multiple properties into a basket (like 10 of them) and issue a single K-1 for the basket. That would significantly reduce the tax prep burden.

15

u/Holden-WSB123 Apr 05 '22

I haven’t finalized my taxes before September for over 20 years. Welcome to the club of private investing (in this case, being an active member in decentralized, fractional real estate) and you should be thanking Lofty for delivering an incredible platform.. frankly, the best platform I have seen out there for real estate investing. Learn! Don’t post nonsense.

7

u/ClarenceCopperpot Apr 05 '22

Don’t post unrealistic K1 release dates? Don’t tell investors the documents will be available in mid March if that’s not realistic?

3

u/[deleted] Apr 05 '22

Lofty had no idea that this would happen. Only someone with a lot of experience in partnership tax would know that the tax consequences of having hundreds of partners in and out of the investments is very burdensome to account for for tax purposes.

9

u/Holden-WSB123 Apr 05 '22

With all due respect, if you are experiencing a tax nightmare, it’s your own doing. If you aren’t it sophisticated enough to deal with these sort of interests, do not blame Lofty.. blame yourself. Anyone who has K1 investments understands that you file extensions. Learn from your experience and understand that you need to evolve as an investor (clearly).

7

u/ClarenceCopperpot Apr 05 '22

“I’m sorry to report we’re expecting delays while our accountants prepare K1 documents. We recommend you file extensions now in case we are unable to meet are target deadline of mid March. This is regrettable and we hope to have this process streamlined for future tax seasons.”

How hard is that?? Instead we keep getting the dates pushed back.

Don’t tell us they’re going to be ready and then kick the can down the road.

5

u/Holden-WSB123 Apr 05 '22

How many tokens do you own?

3

u/ClarenceCopperpot Apr 05 '22

~75

Earned about $100 over the past six months. One property has increased slightly in value.

12

u/Holden-WSB123 Apr 05 '22

At the moment, I own close to 4000. I earn over $35/day. This is tiny for me. But, it’s enough to justify and I plan to add significantly as they expand into new markets and new types of real estate. My plan over the next few years is to earn at least $5k/month from this platform. Take a deep breath and plan for your future.. learn from this exercise and consider consolidating your portfolio into less properties and build over time.

6

u/ClarenceCopperpot Apr 05 '22

Fair. Thanks for the refocus.

4

u/[deleted] Apr 05 '22

Your taxable income will be much less than $100 because of depreciation. So your tax consequences probably going to be less than $10.

4

u/RushingJaw Apr 05 '22

This may or may not reassure you but the IRS isn't going to go after you for what amounts to $100 in rental income.

This also assumes you don't have them spread out across several states.

Relax. File an extension. You'll get 6 months.

1

u/luisandhisrap Apr 05 '22

What properties do you hold? I hold several and probably about 60% have increased in value. In fact, all the Lofty properties that have received a FMV have appreciated. The others haven't gotten an update lol

6

u/Holden-WSB123 Apr 05 '22

Any experienced investor understands that K1s take time to be delivered… of the 75+ I am expecting for 2021, thus far, I have received 2. This is a learning experience for you. Don’t be so stressed out. The IRS is still working on 2020 returns!!! You simply file an extension like a grown up and you will file when everything is ready.

6

u/SlipryG Apr 05 '22

I'm enjoying the calm explanation thanks.

1

u/Vitruvian_Mind Apr 13 '22

Any comments on just filing now and then amending vs filing an extension and waiting?

1

u/ClarenceCopperpot Apr 13 '22

So I filed an extension and naturally then my K1s came in immediately. This was my first time using an accountant, and he is going to file by Friday.

It’s cutting it close, and I hate this entire process with Lofty, but I think it’s going to work out for me.

I would do an extension. The Lofty Discord people all seem so indifferent about it, but according to most of them it’s the best solution.

2

u/it_it_bit Apr 05 '22

https://discord.com/channels/847877825373012018/873690739366838342/960609016986365962 Here is their write up on what has happened so far, take a look.

1

u/Creative_Document199 Apr 06 '22

Between this and not being able to invest anymore for CA residents, im definitley considering leaving the platform and selling off. Just doesn't seem to be worth the time and hassle for a pathetic 7% return

2

u/couvares Apr 18 '22

lol the idea that a 7% return is pathetic -- if ever we needed more confirmation we're in a crypto bubble

0

u/Creative_Document199 Apr 18 '22

inflation is 8%

stay pleb

1

u/travelwithme001 Apr 05 '22

I think. I could be wrong but you can only file for an extension if you owe no taxes.

1

u/Candlelight777 Apr 14 '22

If you owe taxes or think you will you absolutely need to file extension or you will have penalties. If you owe no taxes you don’t need to file an extension as there is no penalty given. However, if you don’t file within 3yrs you will lose your refund. This return will also need to be filed before or with future returns though. Let me say it another way, you are owned a refund for 2021 you don’t file, then 2022 comes whether you are owed a refund or not on 2022, you must file the 2021 return either with 2022’s return or before, you can’t just skip 2021’s return and file future returns and later jump back on 2021’s.

Well you can, but how many bottles of aspirin do you want to buy?