Tax Form for Non-equity investor

[Travis Tekell]

If there are a group of passive investors that contribute money to an entity (...without exchange of ownership interest) and that money is used to buy and develop land; what tax form are return of profits reported on, upon the sale and distribution of real estate proceeds from the land development project? 

[Ashish Acharya]

If you just gave money to the entity without the ownership. That is a lending relationship. 

You don't get a share of the profit. What you get might be an interest income and it is reported on 1099-INT.

If the passive investors were expecting a cut of the gain on sale,  refi, and/or cashflow, then they do own the partnership interest. The income would be reported on K-1s.