NET ASSETS IN LIQUIDATION

12 Months Ended

Dec. 31, 2018

Net Assets In Liquidation [Abstract]

NOTE 4 – NET ASSETS IN LIQUIDATION

The following is a reconciliation of Shareholder's Equity under the going concern basis of accounting to net assets in liquidation under the Liquidation Basis of Accounting as of December 18, 2018.

	Amount
Total equity as of December 18, 2018 (going concern basis)	$	31,259,626
Balance sheet adjustments:
Deferred financing costs (a)		(251,082	)
Distribution and stockholder servicing fee (b)		428,373
Increase due to net realizable value of real estate (c)		15,329,030
Transaction costs (d)		(1,544,240	)
Receipts in excess of liabilities during liquidation (d)		370,913
Interest expense (d)		(621,827	)
Total adjustments	$	13,711,167
Net assets in liquidation December 18, 2018	$	44,970,793

(a)	In contemplation of payment of the Company’s mortgage loans, the balance of deferred financing costs will be written off.

(b)	The Company ceased paying distribution and stockholder servicing fees on November 1, 2018, and all outstanding shares of the Company’s Class T and Class T-3 common stock were converted to shares of the Company’s Class A common stock on January 23, 2019.

(c)	The Company estimates an increase in net realizable value of its remaining properties calculated as follows:

Contract sales price of real estate	$	112,050,000
Less: Real estate carrying value	$	(96,220,970	)
Less: Allowance for potential contract adjustments		(500,000	)
Increase due to net realizable value of real estate	$	15,329,030

(d)

Property operations are on-going until final sale of the Company’s properties. Includes estimated costs associated with selling the Company’s remaining real estate assets, including but not limited to, transfer taxes, title fees, legal fees, debt fees, sales commissions paid to unrelated third party real estate brokers and prorations of operating expenses.

This estimate contains expected future cash outflows related to the Plan of Liquidation. The Liquidation Basis of Accounting requires the Company to estimate net cash flows from operations and to accrue all costs associated with implementing and completing the Plan of Liquidation. The Company currently estimates that it will have estimated costs in excess of estimated receipts during liquidation. These amounts can vary significantly due to, among other things, the timing and amounts associated with discharging known and contingent liabilities and the costs associated with the winding up of operations. These costs are estimated and are anticipated to be paid out over the liquidation period.

Inland Residential Properties Trust, Inc. 10-K