Tax Information for HGR Liquidating Trust
Formerly Hines Global REIT, Inc.
For the 2020 tax year, investors will receive two tax forms for the preparation of their tax returns.
- Form 1099-DIV for Hines Global REIT, Inc. – expected to be mailed on or before Feb. 1
- Grantor Letter for HGR Liquidating Trust – expected to be mailed on or before Mar. 31
Historical Forms 1099-DIV
As a courtesy to assist shareholders in calculating the tax basis and gain / loss of their shares related to the liquidation, please see the schedule below. Shareholders should consult their Forms 1099-DIV as provided previously for each year for dollar amounts, and shareholders should contact their tax advisors.
For additional information, please see HGR Liquidating Trust — Frequently Asked Questions.
Each unitholder will be provided a grantor letter which is an equivalent substitute for Schedule K‑1. It is an itemized statement that reports each unitholder’s allocable share of all of the various categories of revenue and expense of the Trust for the year. Please see the tax implications section of the HGR Liquidating Trust — Frequently Asked Questions.
|Hines Global REIT, Inc. - Information Based on Historical Forms 1099-DIV||12/18/2020||Download xlsx|
Tax Implications of the Recent Liquidating Distributions1
The following Q&A and Cost Basis Calculator are designed to help you understand the tax simplification of the liquidating distributions. Hines Global REIT formed a liquidating trust, called HGR Liquidating Trust (“Trust”) to facilitate the completion of its Plan of Liquidation approved by its stockholders on July 17, 2018. Accordingly, Hines Global REIT formed the Trust and transferred its remaining assets and liabilities to the Trust on June 30, 2020 (the “Liquidation Date”). Please note that this information is provided for illustrative purposes only and to help give you a general understanding of the consequences of the recent liquidating distributions. We are not providing legal or tax advice. Shareholders should contact their tax advisors for specifics regarding the taxation of their individual investments. The questions and answers are based on certain assumptions that may not be accurate.
1. Q: How will liquidating distributions be reported for tax purposes?
A: The noncash liquidating distributions received in 2020, will be reported to shareholders on their 2020 Form 1099-DIV. The liquidating distributions will be included in Box 10, “Noncash Liquidation Distributions” on the 2020 1099-DIV which we expect to be mailed on or before January 31, 2021.
2. Q: What are the tax implications for Box 10, “Noncash Liquidation Distributions” for Taxable Accounts (such as individual or joint tenant type accounts)?
A: The Cash Liquidation Distributions reported in 2018 and 2019 were non-taxable distributions until such time that the total Cash Liquidation Distributions received exceed the cost basis of the investment. If the Cash Liquidation Distributions exceeded the cost basis, the portion of the Cash Liquidation Distributions that exceeded basis was considered a capital gain and taxed accordingly. Whether you reported the gain as a long-term or short-term capital gain in prior year depends on how long you have held the stock.
- If the Cash Liquidation Distributions do not exceed the cost basis, then the full amount of the Cash Liquidation Distributions will be non-taxable.
- If the Cash Liquidation Distributions did not exceed the cost basis in prior year, use the Noncash Liquidation Distribution to calculate the gain / loss that can be recognized in 2020 as the final liquidating distributions has been made and the account has been fully liquidated.
3. Q: What are the tax implications for Box 10, “Noncash Liquidation Distributions” for Non-Taxable Accounts (such as IRAs)?
A: As long as the cash remains within the Qualified Account and is not distributed out of the Qualified account, receipt of noncash Liquidation Distributions by such an account generically will not have any immediate tax implications.
4. Q: How do I calculate the cost basis of the investment?
A: Use the calculator below, or take the following steps to make the calculation:
- Step 1: Use the total cost of the shares, including any costs of purchase such as commissions and fees. (The cost of any shares received pursuant to the dividend reinvestment plan is equal to their value on the date of receipt.)
- Step 2: Reduce the total from Step 1 by all Nondividend Distributions (Box 3 on Form 1099-DIV) reported while you owned the shares, as well as all Cash Liquidation Distributions (Box 9 on Form 1099-DIV) and the Noncash Liquidation Distribution (Box 10 on Form 1099-DIV).
For additional information, please visit HGR Liquidating Trust – Frequently Asked Questions.
According to IRS pronouncements, including IRS Publication 550 (excerpts of which are reproduced below), the calculations should generically be computed separately for each block of shares owned by a taxpayer (i.e., shares acquired in multiple transactions at different times), although use of an average cost across multiple blocks of stock is permitted in certain cases. If you need assistance locating the documents or amounts required for Steps 1 and 2 above, please contact Hines Investor Services at 888.220.6121.
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