Can You Invest in a Real Estate Syndication With an ITIN?
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Yes, you can invest in a real estate syndication with an ITIN if two things are true. First, you are a U.S. resident for tax purposes, for example because you hold a green card or meet the IRS substantial presence test. Second, you are an accredited investor, like anyone else investing in a Rule 506 offering. If both are true, you are a U.S. person for tax purposes: you give a Form W-9 with your ITIN or SSN, the deal sends you a Schedule K-1 each year, and you report it on your return. The ITIN is for tax filing only; it does not change your immigration status or make you accredited. If you are a nonresident alien who would use Form W-8BEN, you cannot invest in DoorRaise deals.
This guide explains who counts as a tax resident, what happens with the W-9, how taxes work and what an ITIN does not change. For the basics of these investments, see apartment syndication for beginners.
What is an ITIN?
An ITIN (Individual Taxpayer Identification Number) is a nine-digit number the IRS issues to people who need a U.S. taxpayer identification number but are not eligible for a Social Security number. It starts with 9. According to the IRS, an ITIN is for federal tax purposes only: it does not authorize work, provide Social Security benefits or change immigration status.
Who is a U.S. resident for tax purposes?
For federal income tax, a non-citizen is a resident if they meet one of these tests under 26 U.S.C. 7701(b):
| Test | What it means |
|---|---|
| Green card | Held lawful permanent resident status at any time during the year |
| Substantial presence | In the U.S. at least 31 days this year and at least 183 days over three years, counting all days this year, one third of last year's days and one sixth of the days two years ago |
Some people, such as certain students, teachers and diplomats, do not count those days. See the IRS substantial presence test and ask your tax adviser if you are unsure.
W-9 or W-8BEN: which one is yours
| You are | Form | Can you invest on DoorRaise? |
|---|---|---|
| U.S. citizen or tax resident with an SSN | W-9 with SSN | Yes, if accredited |
| U.S. tax resident with an ITIN | W-9 with ITIN | Yes, if accredited |
| Nonresident alien | W-8BEN | No |
Form W-9 is for U.S. persons, including resident aliens. See K-1 or 1099: the tax forms an investor gets.
Do the accredited investor tests change?
No. You must meet the same tests as anyone else: income over $200,000 (or $300,000 together with a spouse or spousal equivalent) in each of the last two years with the same expected this year, or net worth over $1 million excluding your primary home, or certain professional licenses. In a 506(c) offering, the sponsor must verify it. See the accredited investor definition and verification.
How do taxes work?
As a tax resident, you receive a Schedule K-1 from the deal each year and report it on your federal return (Form 1040) using your ITIN, the same as an investor with an SSN. You may also need to file in the state where the property is. See K-1s in a syndication and nonresident state tax returns.
Keep your ITIN current
According to the IRS, an ITIN that is not used on a federal tax return at least once in three consecutive tax years expires on December 31 of the third year. An investor who receives a K-1 and files each year normally keeps using it. If your ITIN expires, renew it with Form W-7 before you file.
How DoorRaise fits in
DoorRaise helps sponsors raise equity for apartment buildings with 5+ units from their friends and followers under Rule 506(b) or 506(c). On DoorRaise deals, every investor must be accredited, be a U.S. person for tax purposes, provide a Form W-9 with their ITIN or SSN, and pass identity and sanctions screening. Escrow is at Enterprise Bank & Trust, an FDIC-insured bank, and investors fund by wire only. See pricing. DoorRaise is not a law firm, broker-dealer, investment adviser, funding portal or bank.
Raise your apartment deal from the people who already follow you.
DoorRaise is built for apartment buildings with 5 or more units: one link for the deal, escrow until closing and a standard fee card.
Ready to raise? Create your free sponsor page or see pricing.
FAQ
Do I need a Social Security number to invest?
No, if you are a U.S. tax resident with an ITIN. Form W-9 accepts an ITIN in place of an SSN.
Does having an ITIN make me a tax resident?
No. The ITIN is only a tax filing number. Your tax residency depends on a green card or the substantial presence test.
Can I invest if I live outside the U.S.?
Not in DoorRaise deals. People who are not U.S. tax residents use Form W-8BEN, and DoorRaise's documents require every investor to be a U.S. person.
Can I invest through an LLC or a trust?
An entity uses its own EIN and has its own accredited investor rules. See investing through an LLC or trust.
Next step: see how much to put into a first deal in how much to invest in an apartment syndication.
Sources
- IRS, Individual Taxpayer Identification Number (ITIN)
- IRS, Substantial Presence Test
- IRS, Instructions for the Requester of Form W-9
- 26 U.S.C. 7701(b), resident and nonresident alien defined
- 17 CFR 230.501, accredited investor definition
This article is general information, not legal, tax or investment advice. Your tax residency depends on your facts. Talk to your own tax adviser or attorney. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.