Beware Phantom Income Risk In Crowdfunded Property Deals

By Natalie Rodriguez (March 4, 2015, 3:59 PM EST) -- As the real estate crowdfunding sector barrels out of its infancy stage — it's expected to clear the $2.5 billion investment mark this year — attorneys called on for these deals must be on alert to guard against the rare but troublesome tax problems linked to passing on phantom income to investors, experts say.

The market for crowdfunding campaigns focused on real estate has seen a surge, growing 156 percent last year to more than $1 billion and primed for a similar blockbuster pace this year, according to a Massolution report released Tuesday.

Crowdfunding real estate, however, is still a fledgling...

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