Interest income generated by Upstart fractional loan-related securities is beneficially owned by the investors in each security. The interest income flows through to the investors and is required to be recognized by each investor. Under IRS regulations, WHFITs must file Forms 1099 with the IRS and furnish such forms to all investors whose investments met the annual reporting threshold of $10. The income reported is required to consist of the gross income collected by the WHFIT (i.e., the interest from the borrowers), as allocated to the unit holders of each WHFIT on a pro rata basis.
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