Tax Information for HGR Liquidating Trust 2022

Formerly Hines Global REIT, Inc.

For the 2022 tax year, investors will receive a final 2022 Grantor Let­ter for HGR Liq­ui­dat­ing Trust – expect­ed to be mailed on or around March 15^th.

Each unit hold­er will be pro­vid­ed a Grantor Let­ter which reports allo­ca­ble share of all the var­i­ous cat­e­gories of income, gain, loss, deduc­tion, and cred­it of the Liq­ui­dat­ing Trust for the peri­od Jan­u­ary 1, 2022 – Decem­ber 7, 2022. This infor­ma­tion should be used in deter­min­ing your 2022 tax­able income.

Please see the tax impli­ca­tions sec­tion of the HGR Liq­ui­dat­ing Trust FAQs 2022.

Qual­i­fied Busi­ness Income (“QBI”) Deduc­tion
This state­ment includes infor­ma­tion ref­er­enc­ing Qual­i­fied Busi­ness Income (“QBI”) from the Liq­ui­dat­ing Trust. The QBI deduc­tion gen­er­al­ly allows tax­pay­ers to deduct up to 20% of their QBI com­po­nent. The deduc­tion is gen­er­al­ly lim­it­ed to the less­er of the cal­cu­lat­ed QBI deduc­tion or 20% of the taxpayer’s tax­able income, cal­cu­lat­ed before the QBI deduc­tion, minus taxpayer’s net cap­i­tal gain.

Depend­ing on the taxpayer’s tax­able income, the QBI com­po­nent may also be lim­it­ed based on the type of trade or busi­ness, W‑2 wages paid by that busi­ness, and Unad­just­ed Basis Imme­di­ate­ly after Acqui­si­tion (UBIA) of qual­i­fied prop­er­ty held by the busi­ness. The infor­ma­tion pro­vid­ed is intend­ed to assist tax­pay­ers with cal­cu­lat­ing their indi­vid­ual deduc­tions and lim­i­ta­tions on Form 8995 or 8995‑A depend­ing on their indi­vid­ual tax­able income sit­u­a­tion.

For tax-year 2022, tax­pay­ers with tax­able income before the qual­i­fied busi­ness deduc­tion above $170,050 ($340,100 if mar­ried fil­ing joint­ly) should gen­er­al­ly uti­lize Form 8995‑A. All tax­pay­ers below these thresh­olds should gen­er­al­ly uti­lize Form 8995.

Indi­vid­ual tax sit­u­a­tions may vary, please con­sult your tax advisor.

Unre­lat­ed Busi­ness Tax­able Income (UBTI) Report­ing
Addi­tion­al­ly, if your units are held in a tax-exempt or qual­i­fied account, such as an Indi­vid­ual Retire­ment Account (IRA), you will find infor­ma­tion ref­er­enc­ing unre­lat­ed busi­ness tax­able income (UBTI). UBTI is income earned by a tax-exempt orga­ni­za­tion, such as an IRA, that is not sub­stan­tial­ly relat­ed to the per­for­mance of the tax-exempt func­tions of the tax-exempt orga­ni­za­tion. The Trust did not rec­og­nize UBTI in 2022. 

If your units are held in a tax-exempt or qual­i­fied account, you should con­tact your finan­cial pro­fes­sion­al or cer­ti­fied pub­lic accoun­tant to dis­cuss if there are any addi­tion­al require­ments regard­ing UBTI. They will assist in deter­min­ing if you need to con­tact the trustee or cus­to­di­an for your account in order to help them with fil­ing the cor­rect forms and to pre­pare your annu­al account state­ment from them.

Tax-exempt accounts include IRAs and oth­er qual­i­fied accounts such as 401(k) plans, SEP IRAs, 403(B) accounts and prof­it-shar­ing plans.

Accrued For­eign Tax Report­ing
This state­ment includes infor­ma­tion ref­er­enc­ing Accrued For­eign Tax Cred­it Infor­ma­tion and relates to the Accrued For­eign Tax Cred­it Infor­ma­tion (Table 1) and For­eign Coun­try and Bas­ket Break­out (Table 2) on the last page of your grantor let­ter. This infor­ma­tion is intend­ed to pro­vide tax­pay­ers with the infor­ma­tion nec­es­sary to com­pute their for­eign tax cred­it or for­eign tax deduc­tion. Treat­ment of for­eign tax items vary by tax­pay­er type and indi­vid­ual tax sit­u­a­tion.

To deter­mine for­eign tax cred­it items by for­eign coun­try and bas­ket, mul­ti­ply your share of total For­eign items in Table 1 by the applic­a­ble coun­try and bas­ket per­cent­ages in Table 2. To deter­mine US for­eign tax cred­it items by bas­ket, mul­ti­ply your share of total US items in Table 1 by the applic­a­ble US bas­ket per­cent­age in Table 2. Tax­pay­ers may also down­load the Accrued For­eign Tax Report­ing Cal­cu­la­tor to bet­ter assist with the calculations.

For more infor­ma­tion con­cern­ing for­eign tax deduc­tions and for­eign tax cred­its, tax­pay­ers should con­sult with their tax advi­sor or vis­it this page on the IRS website.

For addi­tion­al infor­ma­tion, please see HGR Liq­ui­dat­ing Trust FAQs 2022.

Infor­ma­tion­al Guides for Users of Tur­b­o­Tax Software

As a cour­tesy, we have pre­pared these guides to answer ques­tions posed by Tur­b­o­Tax with respect to the grantor let­ters unithold­ers received from HGR Liq­ui­dat­ing Trust (the ​“Trust”), but unithold­ers are remind­ed that these guides are being pro­vid­ed sole­ly for infor­ma­tion­al pur­pos­es and all unithold­ers are urged to con­sult with their own tax advi­sors. Please note that the Trust and its affil­i­ates can­not and do not pro­vide income tax advice or guid­ance. The Trust and its affil­i­ates pro­vide no assur­ances as to the accu­ra­cy or com­plete­ness of your tax return if you fol­low these guides and make no under­tak­ing to update these guides. The guides pro­vide num­bered instruc­tions for the rel­e­vant Tur­b­o­Tax ques­tions. Tur­b­o­Tax was not involved in the prepa­ra­tion of these guides, does not endorse them, and has no affil­i­a­tion with the Trust.

Although the unithold­ers received a grantor let­ter, there are sev­er­al ver­sions of Tur­b­o­Tax that do not have a spe­cif­ic area to enter the amounts on grantor let­ters. The amounts can be entered as a Trust Sched­ule K‑1 and the busi­ness gain / Form 4797 sec­tion can be used for the Busi­ness Prop­er­ty Gain. In addi­tion, there sev­er­al ver­sions of Tur­b­o­Tax and these steps try to accom­mo­date dif­fer­ent ver­sions of Tur­b­o­Tax. The grantor let­ters indi­cate where the num­bers should be entered. If your ver­sion of Tur­b­o­Tax dif­fers from these steps, you can use the search bar to search for spe­cif­ic Forms in order to find the loca­tion to enter the amounts.

Infor­ma­tion­al Guides for Users of H&R Block Software

As a cour­tesy, we have pre­pared these guides to answer ques­tions posed by H&R Block with respect to the grantor let­ters unithold­ers received from the Trust, but unithold­ers are remind­ed that these guides are being pro­vid­ed sole­ly for infor­ma­tion­al pur­pos­es and all unithold­ers are urged to con­sult with their own tax advi­sors. Please note that the Trust and its affil­i­ates can­not and do not pro­vide income tax advice or guid­ance. The Trust and its affil­i­ates pro­vide no assur­ances as to the accu­ra­cy or com­plete­ness of your tax return if you fol­low these guides and make no under­tak­ing to update these guides. The guides pro­vide num­bered instruc­tions for the rel­e­vant H&R Block ques­tions. H&R Block was not involved in the prepa­ra­tion of these guides, does not endorse them, and has no affil­i­a­tion with the Trust.

Although the unithold­ers received a grantor let­ter, there are sev­er­al ver­sions of H&R Block that do not have a spe­cif­ic area to enter the amounts on grantor let­ters. The amounts can be entered in the Trust Sched­ule K‑1 sec­tion, Sales and Trans­fers / Form 4797 sec­tion for the Busi­ness Prop­er­ty Gain, and Sales and Trans­fers / Oth­er Invest­ment prop­er­ty for the Part­ner­ship Trans­fer Gain. In addi­tion, these steps try to accom­mo­date dif­fer­ent ver­sions of H&R Block. The grantor let­ters indi­cate where the num­bers should be entered. If your ver­sion of H&R Block dif­fers from these steps, you can use the search bar to search for spe­cif­ic forms in order to find the loca­tion to enter the amounts.

HGR Liq­ui­dat­ing Trust can­not and does not pro­vide income tax advice or guid­ance. Unithold­ers of the Liq­ui­dat­ing Trust are urged to con­sult with their tax advisors.

These descrip­tions of fed­er­al income tax mat­ters are for gen­er­al infor­ma­tion­al pur­pos­es only and do not address all pos­si­ble tax con­sid­er­a­tions that may be mate­r­i­al to you regard­ing own­er­ship of units of the Liq­ui­dat­ing Trust and do not con­sti­tute legal or tax advice. More­over, the Grantor Let­ter does not deal with all tax mat­ters that might be rel­e­vant to a unithold­er in the Liq­ui­dat­ing Trust, in light of their per­son­al cir­cum­stances, nor does it deal with par­tic­u­lar types of unithold­ers that are sub­ject to spe­cial treat­ment under the fed­er­al income tax laws.

The state, local and for­eign tax con­se­quences of any items of income, gain, loss, deduc­tion, or cred­it of the Liq­ui­dat­ing Trust may be treat­ed dif­fer­ent­ly for state, local and for­eign tax pur­pos­es than for fed­er­al income tax pur­pos­es.

The Liq­ui­dat­ing Trust can­not and does not pro­vide income tax advice or guid­ance. Unithold­ers of the Liq­ui­dat­ing Trust are urged to con­sult with their tax advi­sors as to their indi­vid­ual tax con­se­quences and the appro­pri­ate tax report­ing and tax treat­ment of their units.