Closed-end Interval Fund Wildermuth Fund no Longer Qualifies as RIC

According to recent filings with the SEC, Wildermuth Fund reportedly announced that as of Ocotber 15, 2022, it no longer qualifies as a regulated investment company (RIC). 

The Wildermuth Fund, a closed-end interval fund, reportedly seeks to provide long-term capital appreciation to investors by investing in a diversified portfolio of early-stage private equity positions in various asset classes including technology, real estate, healthcare, energy, and hedge funds, according to its website. 

According to the filings, the change in qualification means that the fund’s taxable income will reportedly be subject to tax at corporate rates without any deduction for distributions to shareholders. 

The company also notes in the filing that distributions will generally be taxable as ordinary income to shareholders to the extent of the fund’s current or accumulated earnings and profits. According to the filing, if the shareholder has held the fund’s shares for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date, the dividends will be eligible to be treated as qualified dividend income. 

Further, any “return of capital” dividends, those that are not paid from the fund’s current or accumulated earnings and profits, are generally not taxable but do reduce the shareholder’s tax basis in the fund shares. If the shareholder’s tax basis has been reduced to zero or below, such distributions are taxable. This will apply for 2022 and any year in the fund doesn’t qualify as a regulated investment company. 

If Wildermuth fund seeks to requalify as a regulated investment company in future tax years, it may be required to recognize unrealized gains, pay taxes and make distributions before requalifying, according to the filing. 

Free Consultation with a Securities Attorney 

If you are concerned about an investment in Wildermuth Fund, the White Law Group may be able to help you. Please call the offices at 888-637-5510 for a free consultation with a securities attorney.   

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington.   

For more information on the firm, please visit https://www.whitesecuritieslaw.com.