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buying XLF
Our club was thinking of buying the etf, XLF. Does anyone
know if this poses an accounting problem in Bivio or any tax
complications.

Geetha Bala
Luckshmy Investment Club.

Hi Geetha,

If your club owned XLF, you would have some extra work at tax time. If you look at the information found on page 7 of this tax report they provide:

https://www.spdrs.com/library-content/public/ID3582-IBG-14554_2014%20ETF%20ICI%20Tax%20Summary%20inc%20Additional%20Fields_v5_NN.pdf

You will see that each distribution you receive during the year is reclassified at tax time into an Ordinary and a Qualified portion. That means you'd need to wait for the information from your broker on a 1099 and then edit each dividend entry for the year in bivio to break it into its two parts. It is not something that will be done for you automatically.

This type of extra work causes issues for many treasurers. We recommend that clubs that want to keep their accounting as simple as possible stay away from them. However, others are comfortable with what needs to be done. It is up to you to determine whether or not that would include your club.

Hope that helps.

Laurie Frederiksen
Invest with your friends!
www.bivio.com

Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+

Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe



On Sat, Jul 11, 2015 at 8:04 AM, Geetha Balakrishnan <gdb1000@gmail.com> wrote:
Our club was thinking of buying the etf, XLF. Does anyone
know if this poses an accounting problem in Bivio or any tax
complications.

Geetha Bala
Luckshmy Investment Club.

Good Q&A on XLF. As long as I have been investing, this is new to me. My question is, when looking at shares of XLF or something close, what clues should I look for in a  stock which  could be  an  accounting nightmare?
 
Hari Krishna
Noah J Ronquillo



On Sunday, July 12, 2015 12:58 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:


Hi Geetha,
If your club owned XLF,  you would have some extra work at tax time.  If you look at the information found on page 7 of this tax report they provide:
You will see that each distribution you receive during the year is reclassified at tax time into an Ordinary and a Qualified portion.  That means you'd need to wait for the information from your broker on a 1099 and then edit each dividend entry for the year in bivio to break it into its two parts.  It is not something that will be done for you automatically.
This type of extra work causes issues for many treasurers.  We recommend that clubs that want to keep their accounting as simple as possible stay away from them.  However, others are comfortable with what needs to be done.  It is up to you to determine whether or not that would include your club.
Hope that helps.
Laurie Frederiksen
Invest with your friends!
www.bivio.com

Become our Facebook friend!  www.facebook.com/bivio
Follow us on twitter!  www.twitter.com/bivio
Follow Us on Google+

Click here to Subscribe to the Club Cafe email list.  Click here to  Unsubscribe


On Sat, Jul 11, 2015 at 8:04 AM, Geetha Balakrishnan <gdb1000@gmail.com> wrote:
Our club was thinking of buying the etf, XLF. Does anyone
know if this poses an accounting problem in Bivio or any tax
complications.

Geetha Bala
Luckshmy Investment Club.



Dear Noah,

That is a good question and brings up something anyone in an investment club needs to be aware of.

It starts with an understanding of the fact that everything that has a ticker and is publicly traded is not the same type of investment. All investments are not even stock.

Different types of investments have different tax reporting requirements.

When you buy an investment, it is important to understand what you are purchasing and what type of tax issues it brings along with it.

To keep your record keeping as simple as possible, we'd recommend that you stick to investments in shares of stock in US Corporations. As you stray away from those, your record keeping can become more complicated if not impossible to do with bivio.

We highlight some of the investments that will cause your club problems on this page in our help section:

Before You Invest

If you are looking at a new investment, make sure you understand exactly what type of distributions it pays and the tax reporting requirements on those distributions. You may need to read a prospectus or SEC filing or hunt through a website to find these, but they will be available somewhere.

We are also glad to do the research for you. Just send the Ticker to us at support@bivio.com and we'll let you know before you buy anything that will get you into problems.

Unfortunately, if you purchase something before you find out it is a problem, you will probably have at least 1 year of tax headaches to handle. When you lay those tax headaches on top of the fact that you are accounting for a partnership rather than just an individual investor, they multiply by an order of magnitude.

The good news is that there are many many investments to choose from if you stick to investing in common stock of US Publicly traded companies. I've been in two investment clubs for many years now that are doing quite well sticking within those guidelines. I've also prepared Relative returns graphs for many more that are also successful investing within these parameters.

In general, I think you will find that things like extra tax preparation costs, delays in filing your taxes and extra work for your club treasurer will quickly outweigh some of the perceived "extra income" you may think you'll be getting from investments that are not investments in common stock of regular US corporations.

Laurie Frederiksen
Invest with your friends!
www.bivio.com

Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+

Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe



On Sun, Jul 12, 2015 at 5:46 PM, Noah J. Ronquillo via bivio.com <user*13075900001@bivio.com> wrote:
Good Q&A on XLF. As long as I have been investing, this is new to me. My question is, when looking at shares of XLF or something close, what clues should I look for in a stock which could be an accounting nightmare?
Hari Krishna
Noah J Ronquillo



On Sunday, July 12, 2015 12:58 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:


Hi Geetha,
If your club owned XLF, you would have some extra work at tax time. If you look at the information found on page 7 of this tax report they provide:
You will see that each distribution you receive during the year is reclassified at tax time into an Ordinary and a Qualified portion. That means you'd need to wait for the information from your broker on a 1099 and then edit each dividend entry for the year in bivio to break it into its two parts. It is not something that will be done for you automatically.
This type of extra work causes issues for many treasurers. We recommend that clubs that want to keep their accounting as simple as possible stay away from them. However, others are comfortable with what needs to be done. It is up to you to determine whether or not that would include your club.
Hope that helps.
Laurie Frederiksen
Invest with your friends!
www.bivio.com

Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+

Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe


On Sat, Jul 11, 2015 at 8:04 AM, Geetha Balakrishnan <gdb1000@gmail.com> wrote:
Our club was thinking of buying the etf, XLF. Does anyone
know if this poses an accounting problem in Bivio or any tax
complications.

Geetha Bala
Luckshmy Investment Club.




What about foreign companies traded on US stock exchanges as ADR's?
Dave Rowekamp
Round table Investment Club, Winona, MN

Sent from my iPhone

On Jul 13, 2015, at 08:27, Laurie Frederiksen <laurie@bivio.biz> wrote:

Dear Noah,

That is a good question and brings up something anyone in an investment club needs to be aware of.

It starts with an understanding of the fact that everything that has a ticker and  is publicly traded is not the same type of investment.  All investments are not even stock.

Different types of investments have different tax reporting requirements. 

When you buy an investment, it is important to understand what you are purchasing and what type of tax issues it brings along with it.

To keep your record keeping as simple as possible,  we'd recommend that you stick to investments in shares of stock in US Corporations.  As you stray away from those,  your record keeping can become more complicated if not impossible to do with bivio.

We highlight some of the investments that will cause your club problems on this page in our help section:

Before You Invest

If you are looking at a new investment,  make sure you understand exactly what type of distributions it pays and the tax reporting requirements on those distributions. You may need to read a prospectus or SEC filing  or hunt through a website to find these, but they will be available somewhere.

We are also glad to do the research for you.  Just send the Ticker to us at support@bivio.com and we'll let you know before you buy anything that will get you into problems.

Unfortunately,  if you purchase something before you find out it is a problem, you will probably have at least 1 year of tax headaches to handle.  When you lay those tax headaches on top of the fact that you are accounting for a partnership rather than just an individual investor,  they multiply by an order of magnitude.

The good news is that there are many many investments to choose from if you stick to investing in common stock of US Publicly traded companies.  I've been in two investment clubs for many years now that are doing quite well sticking within those guidelines.  I've also prepared Relative returns graphs for many more that are also successful investing within these parameters.

In general,  I think you will find that things like extra tax preparation costs, delays in filing your taxes and extra work for your club treasurer will quickly outweigh some of the perceived "extra income" you may think you'll be getting from investments that are not investments in common stock of regular US corporations.

Laurie Frederiksen
Invest with your friends!
www.bivio.com

Become our Facebook friend!  www.facebook.com/bivio
Follow us on twitter!  www.twitter.com/bivio
Follow Us on Google+

Click here to Subscribe to the Club Cafe email list.  Click here to  Unsubscribe



On Sun, Jul 12, 2015 at 5:46 PM, Noah J. Ronquillo via bivio.com <user*13075900001@bivio.com> wrote:
Good Q&A on XLF. As long as I have been investing, this is new to me. My question is, when looking at shares of XLF or something close, what clues should I look for in a  stock which  could be  an  accounting nightmare?
 
Hari Krishna
Noah J Ronquillo



On Sunday, July 12, 2015 12:58 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:


Hi Geetha,
If your club owned XLF,  you would have some extra work at tax time.  If you look at the information found on page 7 of this tax report they provide:
You will see that each distribution you receive during the year is reclassified at tax time into an Ordinary and a Qualified portion.  That means you'd need to wait for the information from your broker on a 1099 and then edit each dividend entry for the year in bivio to break it into its two parts.  It is not something that will be done for you automatically.
This type of extra work causes issues for many treasurers.  We recommend that clubs that want to keep their accounting as simple as possible stay away from them.  However, others are comfortable with what needs to be done.  It is up to you to determine whether or not that would include your club.
Hope that helps.
Laurie Frederiksen
Invest with your friends!
www.bivio.com

Become our Facebook friend!  www.facebook.com/bivio
Follow us on twitter!  www.twitter.com/bivio
Follow Us on Google+

Click here to Subscribe to the Club Cafe email list.  Click here to  Unsubscribe


On Sat, Jul 11, 2015 at 8:04 AM, Geetha Balakrishnan <gdb1000@gmail.com> wrote:
Our club was thinking of buying the etf, XLF. Does anyone
know if this poses an accounting problem in Bivio or any tax
complications.

Geetha Bala
Luckshmy Investment Club.




Hi Dave,

In general, investments that trade as ADR's are not an issue.

They can, however, bring complications if they have unusual distributions or go through some sort of reorganization. Since they are not dealing with US tax reporting requirements, the US tax implications of some of these can be difficult at best to find and figure out because the companies often don't make the same information available as US companies would. This can delay us helping you to get proper entries made.

The more US investors a company has, the less likely this is to be a problem.

The other issue with investing in foreign companies is that their reorganizations are often taxable events for US investors. This can mean that you have taxes to pay when you don't expect them.

Laurie Frederiksen
Invest with your friends!
www.bivio.com

Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+

Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe



On Mon, Jul 13, 2015 at 10:11 AM, Dave & Betsy Rowekamp <rowefam@hbci.com> wrote:
What about foreign companies traded on US stock exchanges as ADR's?
Dave Rowekamp
Round table Investment Club, Winona, MN

Sent from my iPhone

On Jul 13, 2015, at 08:27, Laurie Frederiksen <laurie@bivio.biz> wrote:

Dear Noah,

That is a good question and brings up something anyone in an investment club needs to be aware of.

It starts with an understanding of the fact that everything that has a ticker and is publicly traded is not the same type of investment. All investments are not even stock.

Different types of investments have different tax reporting requirements.

When you buy an investment, it is important to understand what you are purchasing and what type of tax issues it brings along with it.

To keep your record keeping as simple as possible, we'd recommend that you stick to investments in shares of stock in US Corporations. As you stray away from those, your record keeping can become more complicated if not impossible to do with bivio.

We highlight some of the investments that will cause your club problems on this page in our help section:

Before You Invest

If you are looking at a new investment, make sure you understand exactly what type of distributions it pays and the tax reporting requirements on those distributions. You may need to read a prospectus or SEC filing or hunt through a website to find these, but they will be available somewhere.

We are also glad to do the research for you. Just send the Ticker to us at support@bivio.com and we'll let you know before you buy anything that will get you into problems.

Unfortunately, if you purchase something before you find out it is a problem, you will probably have at least 1 year of tax headaches to handle. When you lay those tax headaches on top of the fact that you are accounting for a partnership rather than just an individual investor, they multiply by an order of magnitude.

The good news is that there are many many investments to choose from if you stick to investing in common stock of US Publicly traded companies. I've been in two investment clubs for many years now that are doing quite well sticking within those guidelines. I've also prepared Relative returns graphs for many more that are also successful investing within these parameters.

In general, I think you will find that things like extra tax preparation costs, delays in filing your taxes and extra work for your club treasurer will quickly outweigh some of the perceived "extra income" you may think you'll be getting from investments that are not investments in common stock of regular US corporations.

Laurie Frederiksen
Invest with your friends!
www.bivio.com

Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+

Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe



On Sun, Jul 12, 2015 at 5:46 PM, Noah J. Ronquillo via bivio.com <user*13075900001@bivio.com> wrote:
Good Q&A on XLF. As long as I have been investing, this is new to me. My question is, when looking at shares of XLF or something close, what clues should I look for in a stock which could be an accounting nightmare?
Hari Krishna
Noah J Ronquillo



On Sunday, July 12, 2015 12:58 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:


Hi Geetha,
If your club owned XLF, you would have some extra work at tax time. If you look at the information found on page 7 of this tax report they provide:
You will see that each distribution you receive during the year is reclassified at tax time into an Ordinary and a Qualified portion. That means you'd need to wait for the information from your broker on a 1099 and then edit each dividend entry for the year in bivio to break it into its two parts. It is not something that will be done for you automatically.
This type of extra work causes issues for many treasurers. We recommend that clubs that want to keep their accounting as simple as possible stay away from them. However, others are comfortable with what needs to be done. It is up to you to determine whether or not that would include your club.
Hope that helps.
Laurie Frederiksen
Invest with your friends!
www.bivio.com

Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+

Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe


On Sat, Jul 11, 2015 at 8:04 AM, Geetha Balakrishnan <gdb1000@gmail.com> wrote:
Our club was thinking of buying the etf, XLF. Does anyone
know if this poses an accounting problem in Bivio or any tax
complications.

Geetha Bala
Luckshmy Investment Club.