RECEIVERSHIP OF DIVERSIFIED LENDING GROUP, INC. AND APPLIED EQUITIES, INC.
Notice re 2009 Income Tax Matters
The Receiver is advised that historically, payments made to or on behalf of investors in Diversified Lending Group ("DLG") were identified as principal or interest, based on the terms of contract agreements with DLG. Shortly after the appointment of the Receiver in early 2009, it became apparent that the financial condition of DLG would prohibit it from adhering to the terms of contracts with investors. This condition existed at least as early as January 1, 2009. As a result of the financial condition of DLG, effective January 1, 2009, all payments made to or on behalf of investors in DLG are to be treated as return of principal. No part of any such payments will be treated as interest payments to investors. Therefore, no Form 1099 will be issued to the IRS for payments made to or on behalf of DLG investors in 2009.
[10/12/10] As Receiver, I cannot give investors tax advice. An investor recently suggested that I post information to investors of the existence of IRS Revenue Ruling 2009-9 and Revenue Procedure 2009-20, which may be of interest to their financial advisors. That investor suggests also that investors should track the progress of Senate Bill 3166 which she says will give relief to people who suffered losses in non taxable IRA accounts. I am happy to accommodate that investor, but, again, do not represent or warrant the accuracy of the foregoing and again suggest that investors need advice from taxation professionals.
1900 Avenue of the Stars, 11th Floor, Los Angeles, CA 90067 Phone: 310.277.0077 • Fax: 310.277.5735