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How detailed must I be when documenting source of funds and income?

Hello. Let’s say I have about $1.6 million available and I want to use $500,000 for an EB-5 investment. If $600,000 comes from capital gains, would that documentation be enough to prove our legal source of funds? Or would I also have to prove where the other $1 million comes from? This would be hard for me to prove, since the majority of my funds from long-term savings (around 20 years of saving). I have never had a high income.

Answers

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    Julia Roussinova

    Immigration Attorney
    Answered on

    You will need to demonstrate by a preponderance of the evidence (more likely than not) that your EB-5 capital $500,000 has originated from the lawful source of funds. If you are investing in a regional center project, the best practice is to also show that the syndication fee charged by the regional center has originated from the lawful source of funds. Because you can demonstrate $600,000 from the capital gains, you should not have an issue. You will need to demonstrate how you originally acquired the capital asset(s) sold, evidence of the basis of the capital asset(s) originally acquired, evidence of the fair market value of the asset(s), such as a qualified appraisal, evidence of the sale of the asset(s) and evidence that any associated tax liability on the sale of the asset(s) has been satisfied (capital gains income tax if applicable).

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    Dale Schwartz

    Immigration Attorney
    Answered on

    You should just document where the $500,000 came from. Best to document it well.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    You only need to show the legal source of funds for the EB-5 invested amount (so the $500,000 in this case).

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    Charles Foster

    Immigration Attorney
    Answered on

    Generally, you only must document the $500,000, so if you can show you have $600,000 in capital gains, that documentation should be enough to prove a legal source of funds.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    It is advisable that all the sources of funds should be declared regardless of how long the process may take. Show how the savings were gradually accumulated over the years by relying on documents on earnings, investments and, in certain circumstances, sales of properties and tax returns. Cover as many years as possible.

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    Mitch Wexler

    Immigration Attorney
    Answered on

    Although your counsel may decide to mention your net worth, the EB-5 Source of Funds exercise is only required for the amount being invested, i.e. the $500,000 or $1 million depending on the location of the project invested in. Also, funds to cover any administrative fee must also be sourced.

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    Jimena G Cabrera

    Immigration Attorney
    Answered on

    You only need to show the source of funds of the investment ($500,000). The documentation presented must show credible evidence of how the money was earned/obtained.

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    Vaughan de Kirby

    Immigration Attorney
    Answered on

    You must demonstrate that your funds are from a lawful source. Identifying the appropriate documentation should be done by your investment immigration attorney.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    An EB-5 investor must demonstrate by a preponderance of the evidence that the capital invested into the new commercial enterprise was lawfully obtained. It is not necessary to prove a lawful source of funds for all your net worth, just for the part invested in the EB-5 project. If the funds came from capital gains, USCIS will want to see evidence of the sale of the asset, evidence of the value of the asset (appraisal or other evidence) and evidence of the source of funds to purchase the asset in the first place. If income taxes were owed on the capital gains, USCIS might want to see evidence that the tax was paid as well.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    The investment amount only needs to be documented. However, if the $600,000 came from the capital gains, USCIS will ask how you obtained the original investment of which the capital gains were derived.

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    Anthony Korda

    Immigration Attorney
    Answered on

    USCIS requires you to prove the source of the investment funds. The documentation required will depend on many factors such as the length of time it took to accumulate the capital gain and the assets involved. You would not normally be expected to provide evidence of your wealth beyond that of your EB-5 investment.

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    Michael A Harris, Esq

    Immigration Attorney
    Answered on

    Great question. We would have to try to reasonably demonstrate how you capitalized the savings account. The U.S. immigration agency has said that when documentation may be unavailable due to the passage of time, they may allow a reasonable explanation and other documentation to prove the lawful source of the funds. I would hedge very carefully on this matter and try to use as many secondary sources as possible. I would also recommend ensuring you choose an EB-5 project that secures your investment in an escrow account until the approval of your I-526 petition in order to safeguard the approveability of your case before your funds are released.

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    Barbara Suri

    Immigration Attorney
    Answered on

    The law requires that the money submitted for the EB-5 investment MUST be tracked through properly documented sources.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    You do want to provide a total picture but, since you can easily document the $600,000 you earned from capital gains, that would be the area to focus on. Simply explain most of the funds were earned over a long period of time but these funds were earned via capital gains on a certain project.

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