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

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

The documentation needed varies depending 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

Formula reminder:
Net Worth = Total Assets – Total Liabilities

Entity or Trust Investors

There are two ways to qualify:

1. Via Owners

All individual owners (of an 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
• Proof of ownership (LLC operating agreement, IRA statement, or trust document)
• For trusts, make sure to include who the grantor and trustee are

2. Via Entity or Trust Assets

Your entity or trust qualifies if:

• It has over $5 million in assets,
• It was not formed for the specific purpose of investing in this fund, and
• For trusts, a sophisticated person is making the investment decision.

Required Documents (dated within last 90 days):

• Bank or brokerage account statements in the name of the entity or trust
• Asset documentation (real estate appraisals, investment positions, etc.)
• Proof of sophistication (bio, credentials, or certification from trustee/investment advisor)
• Trust agreement or articles of organization
• Written statement confirming the trust/entity was not formed solely for this investment

🧾 Trust Accreditation Scenarios

Because trusts vary widely in structure, here’s what you need to know: