How to Verify Your Accredited Investor Status for a 506(c) Fund

To invest in a 506© fund, the SEC requires all investors to verify their accreditation status. This ensures that participants have the financial knowledge or stability to invest in private offerings.

The documentation needed varies based on how you’re investing—as an individual, jointly, or through an entity/trust—and whether you’re qualifying through income, net worth, or entity assets.

Individual or Joint Tenants

You can qualify in one of two ways:

1. Income-Based Accreditation

You qualify if:

• Your individual income exceeded $200,000 in both 2023 and 2024, and you reasonably expect the same in 2025, or
• Your joint income with a spouse/partner exceeded $300,000 in those years.

Required Documents:

• Tax returns or W2s from the most recent two years. For the year 2025, tax returns or W2s from 2023 and 2024
• If your most recent return hasn’t been filed yet, you may use the two prior years as long as they reflect your current income level. If 2024 taxes are not yet filed, 2022 and 2023 documents are acceptable

2. Net Worth-Based Accreditation

You qualify if your net worth exceeds $1 million, either individually or jointly (excluding your primary residence).

Required Documents:

• Credit report (Equifax preferred) to verify liabilities

  • You can get a free credit report at annualcreditreport.com
  • If assets are jointly held, include credit reports for both individuals

• Proof of assets, such as:

  • Bank or investment account statements
  • 401(k) or other retirement account statements
  • Real estate deeds or valuations (include ownership percentage if joint)
  • Stock, bond, CD account statements
  • Ownership in private securities
  • Annuities, insurance, or similar financial assets
  • Vehicle titles, appraisals, or similar proof of value

⚠️ Note: Personal financial statements or balance sheets are not sufficient on their own.

Formula reminder:
🧮 Net Worth = Total Assets – Total Liabilities

Foreign Investors

If you’re investing from outside the U.S., the same standards apply. Please:

• Provide U.S. documents whenever possible, or
• Submit your country’s equivalent, with translations into English
• All documents should use U.S. dollar equivalents

Entity or Trust Investors

There are two ways to qualify:

1. Via Owners

All individual owners of the entity (LLC, IRA, or Trust) must be accredited through either income or net worth.

Required Documents:

• Income: W2s or tax returns showing income over $200,000 (individual) or $300,000 (joint) for 2023 and 2024
• Net Worth: Credit report(s) + asset statements as listed above
• Proof of entity ownership (IRA statement, LLC or trust formation documents)

2. Via Entity Assets

Your entity qualifies if it has over $5 million in assets and wasn’t formed just to invest in this fund.

Required Documents (dated within last 90 days):

• Bank or investment account statements in the entity’s name
• Appraisals or valuations of owned properties
• Proof of ownership in real estate or securities (include ownership percentage if jointly held)
• Documentation of other assets like equipment, intellectual property, or trademarks