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REIT's - In Living Color
Some of you ask why we recommend that you not invest in REIT's in your investment club. The answer is, because we want you to have simple accounting and record keeping for your club.

Here's what you are up against if you invest in a REIT:

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Each of the "dividends" this club received during the year needed to be made into 4 different entries to correctly report the 4 different types of taxable income each distribution included. These are manual adjustments to your bivio records that you won't know about until you get a 1099. That's if you're lucky. In past years, they didn't even show up on 1099's, they were just posted on a company website and you had to know to go look for them.

Some of the entries affect your cost basis so if you don't (or didn't) make them every year, when you sell your shares your capital gains and losses won't be reported correctly.

Please, please, please make sure you do step 2 of the tax preparation process and make sure your dividends agree with everything on your 1099's. Then go through step 3 and make sure all the capital gains and losses shown in bivio agree with what is shown on your 1099 before you go to step 4 and take the tax interview.

As this report shows, there is information in the "Dividend" section of your 1099 that can impact cost basis. It is extremely important that your records get updated each year when the information comes out. That is why we have added the 1099-DIV review report that you go through when you do step 2.


Laurie Frederiksen
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