Accredited Investor Definition

The question keeps coming up, so I thought a new blog post was in order. The question - what is the definition of an accredited investor for purposes of Reg D?
For years, the definitions that most are familiar with are:

• a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person; OR

• natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year

The confusion apparently stems from a 2011 amendment to the definition under Dodd Frank which excluded the value of the investor's home from the calculation of net worth. An investors' home is no longer included in the calculation.

The earnings definition remains the same, despite the passage of time, but the Commission is now required to review the accredited investor definition in its entirety every 4 years.

The original release is at SEC Adopts Net Worth Standard for Accredited Investors Under Dodd-Frank Act; 2011-274

The definition itself is contained in Rule 501(a) of the Securities Act of 1933.