When you invest in an SPV on Legion Equity, you become a Limited Partner in a Delaware LP. That triggers an annual tax reporting obligation through a Schedule K-1. Here's what to expect.
Will I get a K-1?
Yes. As an LP in a Delaware Limited Partnership (the SPV), you'll receive a Schedule K-1 (Form 1065) for each tax year the SPV is active, not just at exit.
When K-1s arrive
K-1s for calendar-year entities are due by March 15 of the following year.
However, many SPVs file extensions, which pushes the deadline to September 15. If your SPV has filed an extension, you'll be notified.
K-1 preparation is coordinated through Legion's tax reporting partner.
What's on a K-1
The K-1 reports your share of:
Ordinary income or loss
Capital gains or losses
Deductions and credits
Other tax-relevant items from the SPV's activity for the year
The exact line items depend on what happened in the SPV that year: investment activity, distributions, expenses, etc.
Tax implications by investor type
If you're a US taxpayer
You report K-1 income on your personal tax return. Specific treatment depends on the items on the K-1. Your tax advisor can walk you through how it flows into your return.
If you're an international investor
You may be subject to US withholding taxes on certain types of income (such as dividends, typically at 30%, or a lower rate under an applicable tax treaty).
Capital gains from passive SPV investments are generally not taxed for non-US investors.
International investors will also need to complete a FATCA/CRS self-certification form during onboarding. This is a standard requirement for foreign account tax compliance.
When is the final K-1?
The final K-1 is issued during the SPV wind-down phase, after all proceeds from an exit have been distributed and the SPV is being formally dissolved. This typically happens 1-3 months after the exit event.
A note on tax advice
This is general information about how K-1s work in the context of Legion Equity SPVs. It is not tax advice.
Tax treatment varies significantly by:
Your country of residence
Your individual tax situation
The specific income types in any given year
Treaty agreements between countries
Consult your tax advisor for guidance specific to your situation. This is especially important for international investors and for entity investors (LLCs, trusts, family offices).
Need more help?
For questions about a specific K-1, when to expect yours, or where to access prior K-1s, our chat assistant Emily can route you to the right place. Find the chat bubble in the bottom-right of any page on uselegion.com.
For tax advice, please consult a qualified tax professional.
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