Accredited Investor Net Worth Requirement: What Counts and What Doesn't

The accredited investor net worth threshold is $1 million, excluding the value of your primary residence. That means your total assets minus total liabilities minus your home's net equity must equal or exceed $1 million. Sounds straightforward, but the details around what counts—and what gets subtracted—trip up most people.

The $1 Million Net Worth Test Explained

Under SEC Rule 501 of Regulation D, you qualify as an accredited investor if your individual net worth (or joint net worth with a spouse or spousal equivalent) exceeds $1 million. The calculation works like this:

Total Assets (everything you own) minus Total Liabilities (everything you owe) minus Primary Residence Net Value = Accredited Net Worth

If that number exceeds $1 million, you meet the accredited investor net worth requirement. You don't need to also meet the income test—either path qualifies you independently.

What Counts Toward Your Net Worth

Every asset you own outside your primary residence contributes to your accredited investor net worth calculation:

• Investment accounts: Brokerage accounts, IRAs, 401(k)s, and other retirement accounts count at current market value.
• Real estate (non-primary): Rental properties, vacation homes, and land all count. Use fair market value, not purchase price.
• Business interests: Your ownership stake in private businesses counts at fair market value, though valuation can be subjective.
• Cash and savings: Bank accounts, CDs, money market funds.
• Other assets: Cars, boats, jewelry, art, and personal property. These count, but most people don't rely on them to cross the threshold.

A practical example: Sarah has a $600,000 401(k), a $250,000 brokerage account, $100,000 in savings, and a rental property worth $300,000 with a $150,000 mortgage. Her qualifying assets total $1,100,000 ($600K + $250K + $100K + $300K - $150K). She exceeds the $1 million threshold.

What Doesn't Count: The Primary Residence Exclusion

Your primary residence is completely excluded from the asset side. If your home is worth $800,000 and you owe $400,000, that $400,000 in equity adds zero to your accredited investor net worth.

But here's where it gets tricky: mortgage debt on your primary residence is also excluded from the liability side, up to the home's fair market value. If your home is worth $500,000 and your mortgage is $450,000, neither the home value nor the mortgage affects your calculation.

The underwater exception: If your mortgage exceeds your home's value, the excess counts as a liability. Home worth $400,000 with a $500,000 mortgage? That $100,000 difference reduces your accredited investor net worth.

Home equity lines of credit (HELOCs): A HELOC taken out within 60 days before purchasing securities counts as a liability even though it's secured by your home. The SEC added this rule to prevent people from borrowing against their home specifically to inflate their net worth for investment purposes.

Retirement Accounts: Yes, They Count

A common misconception: retirement accounts absolutely count toward the accredited investor net worth threshold. Your 401(k), IRA, Roth IRA, SEP IRA, 403(b), and pension values all qualify. Use the current market value, not the projected future value.

For pensions and defined benefit plans, use the present value of your vested benefit. Many people in their 50s and 60s cross the $1 million threshold primarily through retirement savings. A couple with combined 401(k) balances of $800,000, $150,000 in savings, and a $100,000 brokerage account clears the bar at $1,050,000.

Joint Net Worth With a Spouse

The accredited investor net worth test allows joint calculation with a spouse or spousal equivalent. You combine all assets and all liabilities for both people. This means only one of you needs to be named on the investment—you both qualify based on the joint figure.

This matters because many households hold assets unevenly. One spouse might have the retirement accounts while the other owns rental property. Combined, they cross the threshold even though neither would individually.

Common Mistakes in the Net Worth Calculation

Counting your home equity. The single most common error. Your primary residence equity does not count. Period.

Forgetting liabilities. Student loans, car loans, credit card balances, and other debts reduce your net worth. Someone with $1.2 million in assets but $300,000 in non-mortgage debt has an accredited investor net worth of $900,000—below the threshold.

Overvaluing illiquid assets. Your private business might be worth $2 million or $200,000 depending on who's valuing it. Be honest with yourself. Platforms like CrowdStreet and AcreTrader may ask for documentation, and inflated valuations can create legal risk.

Ignoring vested stock options. Vested, in-the-money stock options count as assets. Unvested options generally don't. If you have 10,000 vested options at a $10 strike price and the stock trades at $50, that's $400,000 in net worth.

How Platforms Verify Your Net Worth

For 506(b) offerings, platforms like CrowdStreet typically rely on self-certification. You check a box confirming you meet the requirement.

For 506(c) offerings, third-party verification is required. You may need to provide recent bank and brokerage statements, a credit report, and a letter from a CPA, attorney, or registered investment advisor confirming your accredited investor net worth exceeds $1 million.

AcreTrader uses 506(c) offerings, so expect a more rigorous verification process. Learn more in How to Become an Accredited Investor.

What If You're Close to $1 Million?

If your net worth sits between $800,000 and $1 million, you have options. You might qualify through the income test instead ($200,000 individual or $300,000 joint for the past two years with reasonable expectation of the same). Read about what accredited investor status actually requires to explore all qualification paths.

You can also access many alternative investments without accreditation through Reg A+ and Reg CF platforms.

Frequently Asked Questions

Does my car count toward accredited investor net worth?

Yes, vehicles count as assets at fair market value. However, any auto loan counts as a liability. A car worth $40,000 with a $25,000 loan adds only $15,000 to your net worth. Most people don't rely on vehicle equity to meet the threshold, but it's part of the full calculation.

Do I need to prove my net worth to every platform?

No. Platforms offering 506(b) securities typically accept self-certification—you confirm you qualify. Only 506(c) offerings require third-party verification with documentation. The verification method depends on the offering type, not the platform's preference.

Can I include my spouse's assets if we're not married?

Yes, since the 2020 SEC rule change. The SEC added "spousal equivalent" to the definition, allowing unmarried partners who share a primary residence to combine net worth. Both partners must meet the spousal equivalent criteria as defined by the SEC.

How often do I need to recalculate my net worth?

You certify your status at the time of each investment. If your net worth drops below $1 million after you've already invested, your existing investments aren't affected. But you can't make new accredited investments until you qualify again through net worth or income.

Does cryptocurrency count toward net worth?

Yes. Crypto holdings count as assets at current market value. The volatility means your accredited status could change rapidly. If you're borderline, don't rely on crypto to maintain your qualification—a 30% drawdown could push you below the $1 million threshold overnight.

Is the $1 million threshold adjusted for inflation?

No. The $1 million figure has remained unchanged since 1982. In inflation-adjusted terms, $1 million in 1982 equals roughly $3.4 million in 2026 dollars. Congress and the SEC have discussed raising it, but no adjustment has been implemented as of 2026.

ModernAlts is an independent research platform. Nothing in this article constitutes investment, legal, or tax advice. Alternative investments involve risk including possible loss of principal.