All - I know people will have definite opinions on what my
club wants to do, but I really just need to know the best
way to do this. We are considering selling all of our stock
by the end of the year, disbursing everything and then
having a new "buy in". We currently have some 20+ year
members and some fairly new members. We have done various
disbursements over the years because we are a small club and
honestly none of us want to be responsible for a large sum
of money in this. We would like to put everyone even by
starting over. We know there will be tax implications. We
don't want to distribute stock (even if Schwab would let us)
- we want cash. What do we need to think about when doing
this? If we cash out everything in November should we add
back in our "buy in" of say 300 per member (10 members) in
December or should we wait until new year in January? Are
there implications in Bivio or Schwab to letting our
account zero out for a month or two? Thanks in advance
for any and all guidance.
Michelle G, Central KY Investment Club
Thomas Vaughn on
Pay half this year and the rest after Jan 1st.
From: club_cafe@bivio.com <club_cafe@bivio.com> on behalf of Michelle Gadberry via bivio.com <user*21289400001@bivio.com> Sent: Tuesday, October 14, 2025 5:50 PM To: club_cafe@bivio.com <club_cafe@bivio.com> Subject: [EXTERNAL][club_cafe] Selling all and starting over
All - I know people will have definite opinions on what my
club wants to do, but I really just need to know the best
way to do this. We are considering selling all of our stock
by the end of the year, disbursing everything and then
having a new "buy in". We currently have some 20+ year
members and some fairly new members. We have done various
disbursements over the years because we are a small club and
honestly none of us want to be responsible for a large sum
of money in this. We would like to put everyone even by
starting over. We know there will be tax implications. We
don't want to distribute stock (even if Schwab would let us)
- we want cash. What do we need to think about when doing
this? If we cash out everything in November should we add
back in our "buy in" of say 300 per member (10 members) in
December or should we wait until new year in January? Are
there implications in Bivio or Schwab to letting our
account zero out for a month or two? Thanks in advance
for any and all guidance.
Michelle G, Central KY Investment Club
CONFIDENTIALITY NOTICE:The content of this email is confidential and intended only for the recipient(s) specified. If you received this message by mistake, please reply immediately so the sender can correct
the error, and then immediately delete this email. Forwarding this email to any third party without the written consent of the sender is strictly prohibited.
Lynda Feit on
We are in the same boat, but we're just looking to reduce the total invested by distributing stock to those members who have the largest accounts. We DEFINITELY do not want to sell stock for cash! The tax bill for individual members would be way too high, and for some of our older members, they could end up with a much higher Medicare premium payment 2 years down the road. (IRS determines Medicare costs using a 2 year look-back at individual's taxes for premium cost for any given year.) It's better if you distribute stock to members, then they can sell, or not sell, any time in the future, and take into account their individual tax situation for any year when making a decision to sell. (Or they could never sell, and when they die, their beneficiaries would get a step-up basis for the stock on the members date of death.)
We transitioned from TDA to Schwab (like so many others), and then found out they wouldn't let us transfer stock to members, so we moved to Fidelity because they do.
I'd suggest you consult bivio staff before embarking on selling it all; I'm fairly certain they can help you do a dummy trial withdrawal to see exactly what the tax implications would be if you sold it all. At least that way, you'd know what the tax consequences would be for each member.
All - I know people will have definite opinions on what my
club wants to do, but I really just need to know the best
way to do this. We are considering selling all of our stock
by the end of the year, disbursing everything and then
having a new "buy in". We currently have some 20+ year
members and some fairly new members. We have done various
disbursements over the years because we are a small club and
honestly none of us want to be responsible for a large sum
of money in this. We would like to put everyone even by
starting over. We know there will be tax implications. We
don't want to distribute stock (even if Schwab would let us)
- we want cash. What do we need to think about when doing
this? If we cash out everything in November should we add
back in our "buy in" of say 300 per member (10 members) in
December or should we wait until new year in January? Are
there implications in Bivio or Schwab to letting our
account zero out for a month or two? Thanks in advance
for any and all guidance.
Michelle G, Central KY Investment Club
Vickie Rabourn on
Our club has been around for over 30 years. Members have come and gone, and we now have just six--two of whom are new--down from a high of about twenty. Some members have nearly $30,000 invested, others less than $1,000. The difference doesn't matter to us.
In May, one of our members decided to withdraw and requested that her shares be transferred from our Schwab account to her E*TRADE account. As the financial officer, I initiated the transfer with no problem--or so I thought. It never went through. Two additional Schwab representatives tried to resolve the issue and each assured me it would be completed, but it wasn't.
After months of phone calls, forms, referrals, and even our former member contacting the SEC, we were finally referred--just last week--to the manager of Schwab's Complex Account team. We now must work directly with him. He has agreed to authorize the transfer as a one-time exception, once we provide a signed letter of authorization from every member.
Here's what I've learned (though please verify this yourself): brokerage firms now strongly discourage investment clubs. Clubs that originally opened through TD Ameritrade were "grandfathered in" when Schwab took over, but new clubs must now have a $250,000 minimum to start. I highly recommend speaking with someone beyond the front-line representatives about your plans. Ask for documentation that outlines the current rules and requirements.
The manager told me he now advises anyone interested in forming an investment club to share information, not accounts. Learn and invest together conceptually--but make your trades individually in your own accounts, and compare results.
All - I know people will have definite opinions on what my
club wants to do, but I really just need to know the best
way to do this. We are considering selling all of our stock
by the end of the year, disbursing everything and then
having a new "buy in". We currently have some 20+ year
members and some fairly new members. We have done various
disbursements over the years because we are a small club and
honestly none of us want to be responsible for a large sum
of money in this. We would like to put everyone even by
starting over. We know there will be tax implications. We
don't want to distribute stock (even if Schwab would let us)
- we want cash. What do we need to think about when doing
this? If we cash out everything in November should we add
back in our "buy in" of say 300 per member (10 members) in
December or should we wait until new year in January? Are
there implications in Bivio or Schwab to letting our
account zero out for a month or two? Thanks in advance
for any and all guidance.
Michelle G, Central KY Investment Club
Carole Jansen on
If an investment club is a legally formed entity, such as a general partnership or an LLC, I still don't understand Schwab's position. If the stated purpose of your legal entity is to make investments, why is this any different than any other GP or LLC making investments.
Our club was with Fidelity, so this is just me, wondering about this from the sidelines.
Our club has been around for over 30 years. Members have come and gone, and we now have just six--two of whom are new--down from a high of about twenty. Some members have nearly $30,000 invested, others less than $1,000. The difference doesn't matter to us.
In May, one of our members decided to withdraw and requested that her shares be transferred from our Schwab account to her E*TRADE account. As the financial officer, I initiated the transfer with no problem--or so I thought. It never went through. Two additional Schwab representatives tried to resolve the issue and each assured me it would be completed, but it wasn't.
After months of phone calls, forms, referrals, and even our former member contacting the SEC, we were finally referred--just last week--to the manager of Schwab's Complex Account team. We now must work directly with him. He has agreed to authorize the transfer as a one-time exception, once we provide a signed letter of authorization from every member.
Here's what I've learned (though please verify this yourself): brokerage firms now strongly discourage investment clubs. Clubs that originally opened through TD Ameritrade were "grandfathered in" when Schwab took over, but new clubs must now have a $250,000 minimum to start. I highly recommend speaking with someone beyond the front-line representatives about your plans. Ask for documentation that outlines the current rules and requirements.
The manager told me he now advises anyone interested in forming an investment club to share information, not accounts. Learn and invest together conceptually--but make your trades individually in your own accounts, and compare results.
All - I know people will have definite opinions on what my
club wants to do, but I really just need to know the best
way to do this. We are considering selling all of our stock
by the end of the year, disbursing everything and then
having a new "buy in". We currently have some 20+ year
members and some fairly new members. We have done various
disbursements over the years because we are a small club and
honestly none of us want to be responsible for a large sum
of money in this. We would like to put everyone even by
starting over. We know there will be tax implications. We
don't want to distribute stock (even if Schwab would let us)
- we want cash. What do we need to think about when doing
this? If we cash out everything in November should we add
back in our "buy in" of say 300 per member (10 members) in
December or should we wait until new year in January? Are
there implications in Bivio or Schwab to letting our
account zero out for a month or two? Thanks in advance
for any and all guidance.
Michelle G, Central KY Investment Club
Sharon Holley on
Just move your account to Fidelity. It's a headache with Schwab because they don't want investment club accounts. But Fidelity is happy to have us. And they will transfer stock to a withdrawing member.
On Tuesday, October 14, 2025, 10:38 PM, Vickie Rabourn via bivio.com <user*26711600001@bivio.com> wrote:
Our club has been around for over 30 years. Members have come and gone, and we now have just six--two of whom are new--down from a high of about twenty. Some members have nearly $30,000 invested, others less than $1,000. The difference doesn't matter to us.
In May, one of our members decided to withdraw and requested that her shares be transferred from our Schwab account to her E*TRADE account. As the financial officer, I initiated the transfer with no problem--or so I thought. It never went through. Two additional Schwab representatives tried to resolve the issue and each assured me it would be completed, but it wasn't.
After months of phone calls, forms, referrals, and even our former member contacting the SEC, we were finally referred--just last week--to the manager of Schwab's Complex Account team. We now must work directly with him. He has agreed to authorize the transfer as a one-time exception, once we provide a signed letter of authorization from every member.
Here's what I've learned (though please verify this yourself): brokerage firms now strongly discourage investment clubs. Clubs that originally opened through TD Ameritrade were "grandfathered in" when Schwab took over, but new clubs must now have a $250,000 minimum to start. I highly recommend speaking with someone beyond the front-line representatives about your plans. Ask for documentation that outlines the current rules and requirements.
The manager told me he now advises anyone interested in forming an investment club to share information, not accounts. Learn and invest together conceptually--but make your trades individually in your own accounts, and compare results.
All - I know people will have definite opinions on what my
club wants to do, but I really just need to know the best
way to do this. We are considering selling all of our stock
by the end of the year, disbursing everything and then
having a new "buy in". We currently have some 20+ year
members and some fairly new members. We have done various
disbursements over the years because we are a small club and
honestly none of us want to be responsible for a large sum
of money in this. We would like to put everyone even by
starting over. We know there will be tax implications. We
don't want to distribute stock (even if Schwab would let us)
- we want cash. What do we need to think about when doing
this? If we cash out everything in November should we add
back in our "buy in" of say 300 per member (10 members) in
December or should we wait until new year in January? Are
there implications in Bivio or Schwab to letting our
account zero out for a month or two? Thanks in advance
for any and all guidance.
Michelle G, Central KY Investment Club
Robert Shaw on
Good answer!
We are at Fidelity and they are easy to work with.
Bob Shaw
CSIC
On Oct 14, 2025, at 8:26 PM, Lynda Feit via bivio.com <user*26876200001@bivio.com> wrote:
We are in the same boat, but we're just looking to reduce the total invested by distributing stock to those members who have the largest accounts. We DEFINITELY do not want to sell stock for cash! The tax bill for individual members would be way too high, and for some of our older members, they could end up with a much higher Medicare premium payment 2 years down the road. (IRS determines Medicare costs using a 2 year look-back at individual's taxes for premium cost for any given year.) It's better if you distribute stock to members, then they can sell, or not sell, any time in the future, and take into account their individual tax situation for any year when making a decision to sell. (Or they could never sell, and when they die, their beneficiaries would get a step-up basis for the stock on the members date of death.)
We transitioned from TDA to Schwab (like so many others), and then found out they wouldn't let us transfer stock to members, so we moved to Fidelity because they do.
I'd suggest you consult bivio staff before embarking on selling it all; I'm fairly certain they can help you do a dummy trial withdrawal to see exactly what the tax implications would be if you sold it all. At least that way, you'd know what the tax consequences would be for each member.
All - I know people will have definite opinions on what my
club wants to do, but I really just need to know the best
way to do this. We are considering selling all of our stock
by the end of the year, disbursing everything and then
having a new "buy in". We currently have some 20+ year
members and some fairly new members. We have done various
disbursements over the years because we are a small club and
honestly none of us want to be responsible for a large sum
of money in this. We would like to put everyone even by
starting over. We know there will be tax implications. We
don't want to distribute stock (even if Schwab would let us)
- we want cash. What do we need to think about when doing
this? If we cash out everything in November should we add
back in our "buy in" of say 300 per member (10 members) in
December or should we wait until new year in January? Are
there implications in Bivio or Schwab to letting our
account zero out for a month or two? Thanks in advance
for any and all guidance.
Michelle G, Central KY Investment Club
Margaret Wentworth on
Hi all,
We have a similar situation with two of us being charter members since 1998 and one since 2005. Our percentage of ownership means if one of us oldies has to withdraw for whatever reason, it would trigger huge capital gains when enough stock is sold to cover the cost. The two of us who are older have decided to graually reduce our holdings by taking out smaller partial withdrawals of $5000.00 periodically.
I wish we had switched to Fidelity instead of Schwab, but since two of us are in our mid 80's now with our time in the club a matter of a few years, we are going the cash route.
Peg Wentworth, Women's Investment Network, Lititz, PA
We are in the same boat, but we're just looking to reduce the total invested by distributing stock to those members who have the largest accounts. We DEFINITELY do not want to sell stock for cash! The tax bill for individual members would be way too high, and for some of our older members, they could end up with a much higher Medicare premium payment 2 years down the road. (IRS determines Medicare costs using a 2 year look-back at individual's taxes for premium cost for any given year.) It's better if you distribute stock to members, then they can sell, or not sell, any time in the future, and take into account their individual tax situation for any year when making a decision to sell. (Or they could never sell, and when they die, their beneficiaries would get a step-up basis for the stock on the members date of death.)
We transitioned from TDA to Schwab (like so many others), and then found out they wouldn't let us transfer stock to members, so we moved to Fidelity because they do.
I'd suggest you consult bivio staff before embarking on selling it all; I'm fairly certain they can help you do a dummy trial withdrawal to see exactly what the tax implications would be if you sold it all. At least that way, you'd know what the tax consequences would be for each member.
All - I know people will have definite opinions on what my
club wants to do, but I really just need to know the best
way to do this. We are considering selling all of our stock
by the end of the year, disbursing everything and then
having a new "buy in". We currently have some 20+ year
members and some fairly new members. We have done various
disbursements over the years because we are a small club and
honestly none of us want to be responsible for a large sum
of money in this. We would like to put everyone even by
starting over. We know there will be tax implications. We
don't want to distribute stock (even if Schwab would let us)
- we want cash. What do we need to think about when doing
this? If we cash out everything in November should we add
back in our "buy in" of say 300 per member (10 members) in
December or should we wait until new year in January? Are
there implications in Bivio or Schwab to letting our
account zero out for a month or two? Thanks in advance
for any and all guidance.
Michelle G, Central KY Investment Club
Sarah Cornwell on
Margaret, We are in the process now of switching and Fidelity is wonderful about it. I can put you in touch with our contact there if at all helpful.
We have a similar situation with two of us being charter members since 1998 and one since 2005. Our percentage of ownership means if one of us oldies has to withdraw for whatever reason, it would trigger huge capital gains when enough stock is sold to cover the cost. The two of us who are older have decided to graually reduce our holdings by taking out smaller partial withdrawals of $5000.00 periodically.
I wish we had switched to Fidelity instead of Schwab, but since two of us are in our mid 80's now with our time in the club a matter of a few years, we are going the cash route.
Peg Wentworth, Women's Investment Network, Lititz, PA
We are in the same boat, but we're just looking to reduce the total invested by distributing stock to those members who have the largest accounts. We DEFINITELY do not want to sell stock for cash! The tax bill for individual members would be way too high, and for some of our older members, they could end up with a much higher Medicare premium payment 2 years down the road. (IRS determines Medicare costs using a 2 year look-back at individual's taxes for premium cost for any given year.) It's better if you distribute stock to members, then they can sell, or not sell, any time in the future, and take into account their individual tax situation for any year when making a decision to sell. (Or they could never sell, and when they die, their beneficiaries would get a step-up basis for the stock on the members date of death.)
We transitioned from TDA to Schwab (like so many others), and then found out they wouldn't let us transfer stock to members, so we moved to Fidelity because they do.
I'd suggest you consult bivio staff before embarking on selling it all; I'm fairly certain they can help you do a dummy trial withdrawal to see exactly what the tax implications would be if you sold it all. At least that way, you'd know what the tax consequences would be for each member.
All - I know people will have definite opinions on what my
club wants to do, but I really just need to know the best
way to do this. We are considering selling all of our stock
by the end of the year, disbursing everything and then
having a new "buy in". We currently have some 20+ year
members and some fairly new members. We have done various
disbursements over the years because we are a small club and
honestly none of us want to be responsible for a large sum
of money in this. We would like to put everyone even by
starting over. We know there will be tax implications. We
don't want to distribute stock (even if Schwab would let us)
- we want cash. What do we need to think about when doing
this? If we cash out everything in November should we add
back in our "buy in" of say 300 per member (10 members) in
December or should we wait until new year in January? Are
there implications in Bivio or Schwab to letting our
account zero out for a month or two? Thanks in advance
for any and all guidance.
Michelle G, Central KY Investment Club
Roman Geletkanycz on
Hi Michelle:
Not sure you are getting input on your question. You clearly state you want input on the mechanics of recording the action, not opinions.
My thought as to timing is to clear out all the old members this year and activate the new members in the new year. This would provide the current members with a clean cutoff and a K-1 for 2025 only. Also, the new members would have no activity (K-1) this year and all the activity in 2026. Be very careful with timing the sales for any dividends which would be paid in 2026. Sell all securities early enough to avoid payouts on them in the new year. You should be able to keep the club active with Schwab and Bivio, as well as the state you are established in, with an old member who is staying active in the future, putting $1 in the club to carry it into the new year. Their contribution in the new year could be the buy in amount less the dollar.
Hope this helps.
Roman
Newfane Investment Partners
On Tuesday, October 14, 2025 at 06:51:23 PM EDT, Michelle Gadberry via bivio.com <user*21289400001@bivio.com> wrote:
All - I know people will have definite opinions on what my club wants to do, but I really just need to know the best way to do this. We are considering selling all of our stock by the end of the year, disbursing everything and then having a new "buy in". We currently have some 20+ year members and some fairly new members. We have done various disbursements over the years because we are a small club and honestly none of us want to be responsible for a large sum of money in this. We would like to put everyone even by starting over. We know there will be tax implications. We don't want to distribute stock (even if Schwab would let us) - we want cash. What do we need to think about when doing this? If we cash out everything in November should we add back in our "buy in" of say 300 per member (10 members) in December or should we wait until new year in January? Are there implications in Bivio or Schwab to letting our account zero out for a month or two? Thanks in advance for any and all guidance. Michelle G, Central KY Investment Club
ira smilovitz on
Roman,
You started off well but ultimately veered off-course. You can't maintain the club's existence with only one member - you need at least two for a partnership. Your comment about watching out for the timing of dividends is unnecessary. Dividends belong to the members of the club when the dividend is paid.
One other thing that I don't think has been mentioned in any of the responses is the possibility of wash sales if the club sells everything and then buys back the same companies in the new year. If any stocks or any lots of stock are sold at a loss and the replacement shares are purchased within 30 days, it will trigger a wash sale - even when the two actions span a year-end. A wash sale in this scenario, where the club essentially liquidates and reforms,will increase the tax burden on those members that leave the club and reduce the future tax burden on those that rejoin in January.
Not sure you are getting input on your question. You clearly state you want input on the mechanics of recording the action, not opinions.
My thought as to timing is to clear out all the old members this year and activate the new members in the new year. This would provide the current members with a clean cutoff and a K-1 for 2025 only. Also, the new members would have no activity (K-1) this year and all the activity in 2026. Be very careful with timing the sales for any dividends which would be paid in 2026. Sell all securities early enough to avoid payouts on them in the new year. You should be able to keep the club active with Schwab and Bivio, as well as the state you are established in, with an old member who is staying active in the future, putting $1 in the club to carry it into the new year. Their contribution in the new year could be the buy in amount less the dollar.
All - I know people will have definite opinions on what my club wants to do, but I really just need to know the best way to do this. We are considering selling all of our stock by the end of the year, disbursing everything and then having a new "buy in". We currently have some 20+ year members and some fairly new members. We have done various disbursements over the years because we are a small club and honestly none of us want to be responsible for a large sum of money in this. We would like to put everyone even by starting over. We know there will be tax implications. We don't want to distribute stock (even if Schwab would let us) - we want cash. What do we need to think about when doing this? If we cash out everything in November should we add back in our "buy in" of say 300 per member (10 members) in December or should we wait until new year in January? Are there implications in Bivio or Schwab to letting our account zero out for a month or two? Thanks in advance for any and all guidance. Michelle G, Central KY Investment Club
Vickie Rabourn on
We're a general partnership, so I don't know why Schwab operates this way. Their policy is no share transfers to a third party, and our member's E*Trade account is a third party. If we had asked to have a check sent to our club's bank account, there would have been no problem. Apparently.
If an investment club is a legally formed entity, such as a general partnership or an LLC, I still don't understand Schwab's position. If the stated purpose of your legal entity is to make investments, why is this any different than any other GP or LLC making investments.
Our club was with Fidelity, so this is just me, wondering about this from the sidelines.
Our club has been around for over 30 years. Members have come and gone, and we now have just six--two of whom are new--down from a high of about twenty. Some members have nearly $30,000 invested, others less than $1,000. The difference doesn't matter to us.
In May, one of our members decided to withdraw and requested that her shares be transferred from our Schwab account to her E*TRADE account. As the financial officer, I initiated the transfer with no problem--or so I thought. It never went through. Two additional Schwab representatives tried to resolve the issue and each assured me it would be completed, but it wasn't.
After months of phone calls, forms, referrals, and even our former member contacting the SEC, we were finally referred--just last week--to the manager of Schwab's Complex Account team. We now must work directly with him. He has agreed to authorize the transfer as a one-time exception, once we provide a signed letter of authorization from every member.
Here's what I've learned (though please verify this yourself): brokerage firms now strongly discourage investment clubs. Clubs that originally opened through TD Ameritrade were "grandfathered in" when Schwab took over, but new clubs must now have a $250,000 minimum to start. I highly recommend speaking with someone beyond the front-line representatives about your plans. Ask for documentation that outlines the current rules and requirements.
The manager told me he now advises anyone interested in forming an investment club to share information, not accounts. Learn and invest together conceptually--but make your trades individually in your own accounts, and compare results.
All - I know people will have definite opinions on what my
club wants to do, but I really just need to know the best
way to do this. We are considering selling all of our stock
by the end of the year, disbursing everything and then
having a new "buy in". We currently have some 20+ year
members and some fairly new members. We have done various
disbursements over the years because we are a small club and
honestly none of us want to be responsible for a large sum
of money in this. We would like to put everyone even by
starting over. We know there will be tax implications. We
don't want to distribute stock (even if Schwab would let us)
- we want cash. What do we need to think about when doing
this? If we cash out everything in November should we add
back in our "buy in" of say 300 per member (10 members) in
December or should we wait until new year in January? Are
there implications in Bivio or Schwab to letting our
account zero out for a month or two? Thanks in advance
for any and all guidance.
Michelle G, Central KY Investment Club
Roman Geletkanycz on
Hi Ira
Thanks for the further update. The wash sale issues are interesting as I am not sure it applies on a partnership basis or individual basis. I can't add any value to that matter.
I did miss the partnership aspect and as such, would have 2 old members who are continuing in the new year do the $1 contribution over the years.
As for the dividends, I assume they are earned at the x-dividend date and the old members should get them Since the membership will change over the years, I think the old members are due dividends receivable, not the new membership. By timing the sales to avoid dividend payouts in the new year, the old membership is kept whole.
On Wednesday, October 15, 2025, 2:56 PM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
Roman,
You started off well but ultimately veered off-course. You can't maintain the club's existence with only one member - you need at least two for a partnership. Your comment about watching out for the timing of dividends is unnecessary. Dividends belong to the members of the club when the dividend is paid.
One other thing that I don't think has been mentioned in any of the responses is the possibility of wash sales if the club sells everything and then buys back the same companies in the new year. If any stocks or any lots of stock are sold at a loss and the replacement shares are purchased within 30 days, it will trigger a wash sale - even when the two actions span a year-end. A wash sale in this scenario, where the club essentially liquidates and reforms,will increase the tax burden on those members that leave the club and reduce the future tax burden on those that rejoin in January.
Not sure you are getting input on your question. You clearly state you want input on the mechanics of recording the action, not opinions.
My thought as to timing is to clear out all the old members this year and activate the new members in the new year. This would provide the current members with a clean cutoff and a K-1 for 2025 only. Also, the new members would have no activity (K-1) this year and all the activity in 2026. Be very careful with timing the sales for any dividends which would be paid in 2026. Sell all securities early enough to avoid payouts on them in the new year. You should be able to keep the club active with Schwab and Bivio, as well as the state you are established in, with an old member who is staying active in the future, putting $1 in the club to carry it into the new year. Their contribution in the new year could be the buy in amount less the dollar.
All - I know people will have definite opinions on what my club wants to do, but I really just need to know the best way to do this. We are considering selling all of our stock by the end of the year, disbursing everything and then having a new "buy in". We currently have some 20+ year members and some fairly new members. We have done various disbursements over the years because we are a small club and honestly none of us want to be responsible for a large sum of money in this. We would like to put everyone even by starting over. We know there will be tax implications. We don't want to distribute stock (even if Schwab would let us) - we want cash. What do we need to think about when doing this? If we cash out everything in November should we add back in our "buy in" of say 300 per member (10 members) in December or should we wait until new year in January? Are there implications in Bivio or Schwab to letting our account zero out for a month or two? Thanks in advance for any and all guidance. Michelle G, Central KY Investment Club
Randy Purvis on
Adding to Ira's comments, if 50% of the current club members exit the club that triggers a "technical termination" which starts the clock on filing a short year tax return. So, timing the exit of the members is important.
The technical termination return is due to be filed within 2 1/2 months of the termination date(unless an extension is filed). For example, if 50% ownership of the club units left the club today, October 15th, a return is expected to be filed on December 31. That is very difficult since you don't get a Consolidated 1099 for 1/1/2025 through 10/15/2025. This is not an issue if only 49% or less ownership exits the club.
Also, note that a technical termination doesn't officially end the partnership. So the remaining members would have a second return requirement for the October 16th to December 31 period. And, the club continues to use the same tax id number.
Back to the original question, our club started in 1967. In 2017 we had 5 out of 15 members that wanted to exit. We decided to "reconstitute" the club and try to attract young new members. We agreed to sell 1/2 of the investments in December and 1/2 in January. We distributed the cash in mid January. The idea was to split the taxable gains between two tax years. The 5 departing members exited the club as of December 31 so they got the valuation report from Bivio for that date and got their money within two weeks of departure. Their gains were all taxable as of 12/31 because they were leaving the partnership. The rest of us got 1/2 of the realized gain in 2017 and the other half in 2018. In January we got our money and then reinvested in the club. Most everyone put $1,000 back in with one member putting in $10,000. We now are back to 20 members.
Randy Purvis
D & C Investment Club
Sent from my iPhone
On Oct 15, 2025, at 2:56â¯PM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:

Roman,
You started off well but ultimately veered off-course. You can't maintain the club's existence with only one member - you need at least two for a partnership. Your comment about watching out for the timing of dividends is unnecessary. Dividends belong to the members of the club when the dividend is paid.
One other thing that I don't think has been mentioned in any of the responses is the possibility of wash sales if the club sells everything and then buys back the same companies in the new year. If any stocks or any lots of stock are sold at a loss and the replacement shares are purchased within 30 days, it will trigger a wash sale - even when the two actions span a year-end. A wash sale in this scenario, where the club essentially liquidates and reforms,will increase the tax burden on those members that leave the club and reduce the future tax burden on those that rejoin in January.
Not sure you are getting input on your question. You clearly state you want input on the mechanics of recording the action, not opinions.
My thought as to timing is to clear out all the old members this year and activate the new members in the new year. This would provide the current members with a clean cutoff and a K-1 for 2025 only. Also, the new members would have no activity (K-1) this year and all the activity in 2026. Be very careful with timing the sales for any dividends which would be paid in 2026. Sell all securities early enough to avoid payouts on them in the new year. You should be able to keep the club active with Schwab and Bivio, as well as the state you are established in, with an old member who is staying active in the future, putting $1 in the club to carry it into the new year. Their contribution in the new year could be the buy in amount less the dollar.
All - I know people will have definite opinions on what my club wants to do, but I really just need to know the best way to do this. We are considering selling all of our stock by the end of the year, disbursing everything and then having a new "buy in". We currently have some 20+ year members and some fairly new members. We have done various disbursements over the years because we are a small club and honestly none of us want to be responsible for a large sum of money in this. We would like to put everyone even by starting over. We know there will be tax implications. We don't want to distribute stock (even if Schwab would let us) - we want cash. What do we need to think about when doing this? If we cash out everything in November should we add back in our "buy in" of say 300 per member (10 members) in December or should we wait until new year in January? Are there implications in Bivio or Schwab to letting our account zero out for a month or two? Thanks in advance for any and all guidance. Michelle G, Central KY Investment Club
Randy Purvis on
Note that 50% is the ownership of "units in the partnership" and not just individuals.
Randy Purvis
Sent from my iPhone
On Oct 15, 2025, at 3:49â¯PM, Randy Purvis <rpurvissr@gmail.com> wrote:
Adding to Ira's comments, if 50% of the current club members exit the club that triggers a "technical termination" which starts the clock on filing a short year tax return. So, timing the exit of the members is important.
The technical termination return is due to be filed within 2 1/2 months of the termination date(unless an extension is filed). For example, if 50% ownership of the club units left the club today, October 15th, a return is expected to be filed on December 31. That is very difficult since you don't get a Consolidated 1099 for 1/1/2025 through 10/15/2025. This is not an issue if only 49% or less ownership exits the club.
Also, note that a technical termination doesn't officially end the partnership. So the remaining members would have a second return requirement for the October 16th to December 31 period. And, the club continues to use the same tax id number.
Back to the original question, our club started in 1967. In 2017 we had 5 out of 15 members that wanted to exit. We decided to "reconstitute" the club and try to attract young new members. We agreed to sell 1/2 of the investments in December and 1/2 in January. We distributed the cash in mid January. The idea was to split the taxable gains between two tax years. The 5 departing members exited the club as of December 31 so they got the valuation report from Bivio for that date and got their money within two weeks of departure. Their gains were all taxable as of 12/31 because they were leaving the partnership. The rest of us got 1/2 of the realized gain in 2017 and the other half in 2018. In January we got our money and then reinvested in the club. Most everyone put $1,000 back in with one member putting in $10,000. We now are back to 20 members.
Randy Purvis
D & C Investment Club
Sent from my iPhone
On Oct 15, 2025, at 2:56â¯PM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:

Roman,
You started off well but ultimately veered off-course. You can't maintain the club's existence with only one member - you need at least two for a partnership. Your comment about watching out for the timing of dividends is unnecessary. Dividends belong to the members of the club when the dividend is paid.
One other thing that I don't think has been mentioned in any of the responses is the possibility of wash sales if the club sells everything and then buys back the same companies in the new year. If any stocks or any lots of stock are sold at a loss and the replacement shares are purchased within 30 days, it will trigger a wash sale - even when the two actions span a year-end. A wash sale in this scenario, where the club essentially liquidates and reforms,will increase the tax burden on those members that leave the club and reduce the future tax burden on those that rejoin in January.
Not sure you are getting input on your question. You clearly state you want input on the mechanics of recording the action, not opinions.
My thought as to timing is to clear out all the old members this year and activate the new members in the new year. This would provide the current members with a clean cutoff and a K-1 for 2025 only. Also, the new members would have no activity (K-1) this year and all the activity in 2026. Be very careful with timing the sales for any dividends which would be paid in 2026. Sell all securities early enough to avoid payouts on them in the new year. You should be able to keep the club active with Schwab and Bivio, as well as the state you are established in, with an old member who is staying active in the future, putting $1 in the club to carry it into the new year. Their contribution in the new year could be the buy in amount less the dollar.
All - I know people will have definite opinions on what my club wants to do, but I really just need to know the best way to do this. We are considering selling all of our stock by the end of the year, disbursing everything and then having a new "buy in". We currently have some 20+ year members and some fairly new members. We have done various disbursements over the years because we are a small club and honestly none of us want to be responsible for a large sum of money in this. We would like to put everyone even by starting over. We know there will be tax implications. We don't want to distribute stock (even if Schwab would let us) - we want cash. What do we need to think about when doing this? If we cash out everything in November should we add back in our "buy in" of say 300 per member (10 members) in December or should we wait until new year in January? Are there implications in Bivio or Schwab to letting our account zero out for a month or two? Thanks in advance for any and all guidance. Michelle G, Central KY Investment Club