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snap shot vs. time based
I am a replacement treasurer using Bivio. I have been
doing this for 2 years of our 11 year existence. Two of our
members left the club recently and I asked for a "Member Tax
Allocation report. Get a msg back saying I can't get it
because we use snapshot.

I cannot find a detailed explanation of the 2 options.

What are differences? Can I switch back and forth? Do I
care? Will it impact partner's results on withdrawal?

What impact does it have on the remaining partner's? Their
Tax basis?

Thanks
Hi Jim,

This help topic describes the two different methods:

https://www.bivio.com/site-help/bp/Tax_Allocations_Methods_Help

Your club should agree on what method you want to use and it should be consistent. The IRS allows a lot of flexibility for partnership allocations but does require that they be agreed to by all the partners and that they have "Substantial economic effect". That means they are based on business requirements, not just to try and reduce taxes. If the method is not defined, it must be made in accordance with the "Partners interest in the partnership" In a club, this can change every time member payments are recorded which is why time based is the default allocation method.

The two methods will impact all partners taxes a bit differently. They will also apply to the entire year. You can't do one for part of the year and another for another part of the year.

Hope that helps!


Laurie Frederiksen
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On Mon, Dec 16, 2013 at 5:24 PM, Jim Cartlidge <jacartlidge@comcast.net> wrote:
I am a replacement treasurer using Bivio. I have been
doing this for 2 years of our 11 year existence. Two of our
members left the club recently and I asked for a "Member Tax
Allocation report. Get a msg back saying I can't get it
because we use snapshot.

I cannot find a detailed explanation of the 2 options.

What are differences? Can I switch back and forth? Do I
care? Will it impact partner's results on withdrawal?

What impact does it have on the remaining partner's? Their
Tax basis?

Thanks