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Updated about 5 years ago on . Most recent reply

User Stats

16
Posts
6
Votes
Jonathan Clark
  • Snoqualmie, WA
6
Votes |
16
Posts

Financial thresholds for accredited investor status

Jonathan Clark
  • Snoqualmie, WA
Posted

I have been researching what the qualifications are to be considered an accredited investor this evening.    I found a ton of answers through internet searches that all seem to agree upon these foundational criteria:

* Your net worth (not including any equity you own in your primary residence) is over $1 Million. 

* Your income is over $200K (or $300K for married couples) for the last 2 years and expected to be the same or more in the current year.  

I am only able to find very limited information on how income is calculated or what is included.     It seems obvious that W2 wages/tips would be included.    I found that deferred compensation (like 401K matching contributions from an employer)  can be included as income to the extent that it's vested.    What about:

  • Stock dividends (1099-DIV) ?
  • Capital gains  (short or long term)?
  • Rental Income?
  • Anything else? 

Is there a form or spreadsheet somewhere that I could use as a reference for calculation of "income" in this context?   

Thanks and happy turkey day! 

Most Popular Reply

Account Closed
  • Investor
  • Princeton, TX
1,080
Votes |
1,900
Posts
Account Closed
  • Investor
  • Princeton, TX
Replied

@Jonathan Clark    It is important to remember that it is...

* Your net worth (not including any equity you own in your primary residence) is over $1 Million.

OR (not and)

* Your income is over $200K (or $300K for married couples) for the last 2 years and expected to be the same or more in the current year.

I believe all the experts believe all investment income should be included.

Remember these regulations are for YOURS protection.

Having a million dollars does not really make anyone qualified to invest in complex investments like...

Credit Default Swaps

Complex Derivatives in any form (I am not talking about the ones related to the Cauchy-Riemann Equations)

Commodities

Currencies 

Just to name a few of the ones that start for "C".

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