Regulation Crowdfunding Education Center
Because of the risks inherent to crowdfunding investments, federal law puts inflation-adjusted limits on the amount an investor can place into Title III offerings during any 12-month period. These limits are based on your annual income and net worth:
- If either your annual income or net worth is less than $107,000, then during any 12-month period, you can invest up to the greater or either $2,200 or 5% of the lesser of your annual income or net worth.
- If both your annual income and your net worth are equal to or more than $107,000, then during any 12-month period, you can invest up to 10% of annual income or net worth, whichever is lesser, but not to exceed $107,000.
Your net worth is the sum of all your assets minus all your liabilities. For the purposes of a Title III investment limit calculation, the value of your primary residence is not allowed to be included in your assets, and any mortgage or other loan on your primary residence should not be included in your liabilities, assuming it is equal to or less than the fair market value of your home.
The table below provided by the SEC shows specific examples of investment limits:
According to the SEC, you can calculate your annual income or net worth jointly with your spouse, whether or not property is held jointly. However, if you calculate income or net worth jointly, the total of each person’s Title III investments cannot exceed the limits that apply to an individual at that level of income or net worth.
If you are unsure how much you can invest under Title III, feel free to contact us or ask your accountant or financial advisor.