Good News (sort of)

Our 1099 arrived via mail today.  Turns out the good folks at Bar-K zeroed it out without even having to be asked, so we won’t be paying interest on all that money we made in 2010 on our “investment”.  Yee-haw.

5 thoughts on “Good News (sort of)

  1. So, Bar-K investors have received interest in 2010? That sure is good news for those who did and have received a 1099 that shows an amount of zero. You may also remember that the 4Q2008’s accrued interest was reversed.

    At this point, I am sure investors who have not got any payouts are more concerned about their principal vs. interest. Let’s go back and refresh our memories about what Bar-K wants us to believe as to the value of the principal currently is. Yes, they are fat cats.

    • For an individual investor accrued interest is taxable whether it is paid out or not. I believe that is why RE Loans indicated they would no lonoger be sending out any statements reflecting accrued interest but that they would keep track of it on their own books. Hence the 1099s showing no interest. And remember, you’re not an investor in Bar-K. You are a noeholder of RE Loans, LLC – a picky comment – but…….

  2. I’m not asking for tax advise but my brother noteholder will be 70 this year. The following is from the IRS web site:

    Required Minimum Distributions (RMDs) generally are minimum amounts that a retirement plan account owner must withdraw annually starting with the year that he or she reaches 70 ½ years of age or, if later, the year in which he or she retires. However, if the retirement plan account is an IRA or the account owner is a 5% owner of the business sponsoring the retirement plan, the RMDs must begin once the account holder is age 70 ½, regardless of whether he or she is retired.

    How do make or account for an RMD when you funds are frozen?

    • THAT is a question which will be answered when one or more of us discuss the issue with an IRS agent in connection with our tax returns for 2010. The IRS has taken the position that if an individual has 2 IRAs then the amount owing on one can be taken from the other, i.e. the required RMDs for both IRAs may be taken from just one of them. The question is whetheer the IRS will take the position that you MUST take the combined RMDs from the liquid IRA. I’ve stated it poorly, I know, but you get the drift. Anyone with an IRA in addition to the one they may have with RE Loans could really take a big hit if the IRS says, “Sorry your one IRA is so illiquid, but your 2nd one isn’t – so make your total RMD withdrawal from it and that’s what we get to tax.”

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