How Taxes Work with the Binaryx Platform

This article provides details on taxes for real estate you have invested in through the Binaryx platform, covering legal ownership, specific tax structures, and exactly where to find your reporting documents.

Ownership Verification on the Binaryx Platform

Firstly, it is essential to understand the legal mechanism Binaryx uses to verify your property ownership. Your legal co-ownership of real estate is validated through a U.S. legal entity.

The Role of the US LLC

For every real estate property, an American LLC (Limited Liability Company) is established in the state of Wyoming. Thus, your lawful ownership is affirmed through proportional co-ownership in this company. When you acquire property ownership rights through tokens, you essentially purchase rights to ownership and management within the LLC.

For instance, acquiring 3% of a real estate object’s tokens makes you a co-owner of 3% of the American LLC that holds the property.

How Taxes Work with the Binaryx Platform

Under U.S. regulations, all companies must file reports with the IRS. Binaryx Platform takes care of this for its clients, handling all tax reporting for each LLC company (i.e., property). If you are not a US resident, you don’t need to take any action regarding the company's filing. However, understanding the platform’s taxation process is important.

Key Taxation Principles

• Pass-Through Entities: LLCs registered for each property act as pass-through entities. This means the organization itself doesn’t pay taxes but instead transfers this responsibility to its owners.
• Reporting Limits: The LLC files tax reports in the U.S. with the IRS but does not file reports in other countries or with tax services of other nations.
• Investor Responsibility: The LLC does not pay taxes for its co-owners (real estate investors). Each co-owner must independently file reports and pay taxes on their income in their country of residence.

Note: We advise consulting with your tax consultant in your residence country about your specific tax obligations.

Understanding Schedule K-1

According to regulations for legal entities, we must submit a special tax form to the IRS known as Schedule K-1.

What is Schedule K-1 (Form 1065)?

Schedule K-1 is used in the U.S. to distribute shares of income, losses, and capital among participants of a partnership or LLC that has chosen the partnership tax regime.

Instead of the LLC paying taxes on its profit directly, it shifts this responsibility to its members. Each participant receives a K-1 form indicating their share of income, aiding members and the IRS in understanding each partner’s share of profits or losses. It is a legal formality required by the U.S. tax service to send this form to all company co-owners.

Where to Find Your Tax Documents

Accessing your tax forms, including Schedule K-1, is straightforward on the Binaryx platform. We have streamlined the process to ensure you can quickly retrieve the documents needed for your local tax filings.

Step-by-Step Guide:

1. Open the main Menu on the Binaryx platform.
2. Navigate to the Portfolio section.
3. Look for the button named "Documents" and click it.

In this section, you will find all legal and tax-related documents associated with your property investments, ready for download.