Disbanding
I have been Treasurer for my partnership for over 15 years and my comments are often prefaced with, "I read that..." but I never presume to offer advice of a specific nature. If I have read about something, I generally share the gist as well as a link to what I read and let my partners see how it affects them specifically.
All that being said, the original question related that a member wanting to transfer funds to her 401(k) plan which she, and everyone, should know by now is not possible. If someone explained the nature of 401(k) plans and the various types of IRAs, she would be better served.
As for ours being a litigious society, that is sad but so true.
Mike Jones
Wall$treet Wannabees
From: Tim Hoyman <tim@timhoyman.com>
To: club_cafe@bivio.com
Sent: Thursday, September 4, 2014 10:29 AM
Subject: RE: [club_cafe] Disbanning
I understand the point of view of the generality of my statement. However, in my profession (real estate) when issues do get complicated I always recommend tax and legal advice. I also have tax professionals and attorneys in my area who can and will answer those questions. After all, consulting with tax professionals is a lot easier than having an issue with the IRS.
In the particular issue with an individual trying to offer advice for others on how to take money out, this can create problems down the road if there are surprises. If the answer is easy then that's fine. However, I do not want to take on the added burden of
giving legal/tax advice to others. After all, we are in a highly litigious society.
Tim Hoyman
Colorado Leprechauns
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Mike Jones via bivio.com
Sent: Thursday, September 04, 2014 8:26 AM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Disbanning
Sent: Thursday, September 04, 2014 8:26 AM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Disbanning
I am amazed at how many people suggest consulting with your 'tax adviser' as if anyone really has one any more. Since TurboTax was introduced, I have been able to handle sales of stocks and rental properties as well as depreciation and consulting expenses without needing a tax adviser.
I believe that people who own a 401(k) need to know how they work and whether it is to their advantage to, at some point, roll their holdings into an IRA. They can figure this out by reading articles in magazines or on the Internet. If you are wise enough to have saved for retirement, you need to also take responsibility for protecting your assets and that means spending some time learning about your options.
Mike Jones
Wall$treet Wannabees
Bloomington, MN
From: Tim Hoyman <tim@timhoyman.com>
To: club_cafe@bivio.com
Sent: Wednesday, August 27, 2014 6:36 PM
Subject: RE: [club_cafe] Disbanning
To: club_cafe@bivio.com
Sent: Wednesday, August 27, 2014 6:36 PM
Subject: RE: [club_cafe] Disbanning
I would suggest you tell each member to consult with their tax advisor and let them decide.
Tim Hoyman
Colorado Leprechauns
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Linda
Sent: Wednesday, August 27, 2014 5:34 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Disbanning
Sent: Wednesday, August 27, 2014 5:34 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Disbanning
No, the money cannot be put in a 401k if that is what the person is asking.
The fairest thing to do is to sell stocks and pay cash to everyone. Otherwise tax implications will be unequal. You will still need to file a tax return for 2014 and issue k-1's so you may want to hold back $20 to cover cost of mailing k-1's and tax returns. Depending on your renewal date for Bivio you may need to pay for renewal to have the
tax return prepared. Check with Bivio on that.
Linda (tax preparer)
Sent via the Samsung GALAXY S(R)4, an AT&T 4G LTE smartphone
-------- Original message --------
From: Kittie Caldwell
Date:08/27/2014 5:25 PM (GMT-05:00)
To: The Club Cafe
Subject: Re: [club_cafe] Disbanning
Thank you so much for your replies on disbanding. I checked our agreement and it say decisions will be made by 2/3 vote. I now have 6 of 7 wanting to disband. I have been the treasurer for at least 6+ years and no one wants the job. I never could get anyone to shadow me and now I am moving to Georgia. The club was formed in 1995 and it has been a great club but the members are not that interested in continuing.
My next question is: Can some members take stock for payment and some take cash or do we have to do it all the same? One member is considering stock. Another member asked if her money could be sent to her 401? I told her to ask her accountant. Cash seems the easiest to me.
Thanks,
Kittie Caldwell
TWIG
On Wed, Aug 27, 2014 at 9:13 AM, Laurie Frederiksen <laurie@bivio.biz> wrote:
What rules has your club set up in your partnership agreement or operating procedures for making decisions? You'll need to follow those rules to determine whether a decision is binding on all members if 5 out of 7 people agree to it.
Even if the decision is final for the current club, there is nothing wrong with the two people that want to continue participating in a club starting up a new one.
Or, as Bob pointed out, if 5 people want
to leave the club, you don't necessarily have to vote to disband it entirely. If you have more than 1 person working together at a business, it is a partnership. You could certainly continue an investment group with only 2 people in it if it worked for those two people.
Laurie Frederiksen
Invest with your friends!
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Re "asking your tax advisor":
As a tax preparer of many years, I have a lot of experience with how well other preparers do their job. Like any profession, some are good at their job and some are not, so be careful who you are asking for advice. Many are just too busy during tax season to do their job correctly and many mistakes are made. While selling your units in an investment club should be a simple transaction for the tax preparer to handle, if you give the person all the necessary information (Bivio has nice withdrawal reports), I would guess that many of these are not reported correctly. Make sure you give the tax preparer the withdrawal report if you leave a club. Every tax payer should understand what is on his or her tax return and how it got there. You need to be informed and ask questions. Don't just blindly sign your return without understanding it.
Retirement accounts have their own set of rules and they can be complicated. Moving from one retirement account to another can have tax consequences if not done correctly. Certain rollovers can only be done once a year. Banks are not a good source of tax advice.
Educate yourself!
Linda
Pointe Players
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Mike Jones via bivio.com
Sent: Thursday, September 04, 2014 1:00 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Disbanding
I have been Treasurer for my partnership for over 15 years and my comments are often prefaced with, "I read that..." but I never presume to offer advice of a specific nature. If I have read about something, I generally share the gist as well as a link to what I read and let my partners see how it affects them specifically.
All that being said, the original question related that a member wanting to transfer funds to her 401(k) plan which she, and everyone, should know by now is not possible. If someone explained the nature of 401(k) plans and the various types of IRAs, she would be better served.
As for ours being a litigious society, that is sad but so true.
Mike Jones
Wall$treet Wannabees
From: Tim Hoyman <tim@timhoyman.com>
To: club_cafe@bivio.com
Sent: Thursday, September 4, 2014 10:29 AM
Subject: RE: [club_cafe] Disbanning
I understand the point of view of the generality of my statement. However, in my profession (real estate) when issues do get complicated I always recommend tax and legal advice. I also have tax professionals and attorneys in my area who can and will answer those questions. After all, consulting with tax professionals is a lot easier than having an issue with the IRS.
In the particular issue with an individual trying to offer advice for others on how to take money out, this can create problems down the road if there are surprises. If the answer is easy then that's fine. However, I do not want to take on the added burden of giving legal/tax advice to others. After all, we are in a highly litigious society.
Tim Hoyman
Colorado Leprechauns
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Mike Jones via bivio.com
Sent: Thursday, September 04, 2014 8:26 AM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Disbanning
I am amazed at how many people suggest consulting with your 'tax adviser' as if anyone really has one any more. Since TurboTax was introduced, I have been able to handle sales of stocks and rental properties as well as depreciation and consulting expenses without needing a tax adviser.
I believe that people who own a 401(k) need to know how they work and whether it is to their advantage to, at some point, roll their holdings into an IRA. They can figure this out by reading articles in magazines or on the Internet. If you are wise enough to have saved for retirement, you need to also take responsibility for protecting your assets and that means spending some time learning about your options.
Mike Jones
Wall$treet Wannabees
Bloomington, MN
From: Tim Hoyman <tim@timhoyman.com>
To: club_cafe@bivio.com
Sent: Wednesday, August 27, 2014 6:36 PM
Subject: RE: [club_cafe] Disbanning
I would suggest you tell each member to consult with their tax advisor and let them decide.
Tim Hoyman
Colorado Leprechauns
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Linda
Sent: Wednesday, August 27, 2014 5:34 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Disbanning
No, the money cannot be put in a 401k if that is what the person is asking.
The fairest thing to do is to sell stocks and pay cash to everyone. Otherwise tax implications will be unequal. You will still need to file a tax return for 2014 and issue k-1's so you may want to hold back $20 to cover cost of mailing k-1's and tax returns. Depending on your renewal date for Bivio you may need to pay for renewal to have the tax return prepared. Check with Bivio on that.
Linda (tax preparer)
Sent via the Samsung GALAXY S(R)4, an AT&T 4G LTE smartphone
-------- Original message --------
From: Kittie Caldwell
Date:08/27/2014 5:25 PM (GMT-05:00)
To: The Club Cafe
Subject: Re: [club_cafe] Disbanning
Thank you so much for your replies on disbanding. I checked our agreement and it say decisions will be made by 2/3 vote. I now have 6 of 7 wanting to disband. I have been the treasurer for at least 6+ years and no one wants the job. I never could get anyone to shadow me and now I am moving to Georgia. The club was formed in 1995 and it has been a great club but the members are not that interested in continuing.
My next question is: Can some members take stock for payment and some take cash or do we have to do it all the same? One member is considering stock. Another member asked if her money could be sent to her 401? I told her to ask her accountant. Cash seems the easiest to me.
Thanks,
Kittie Caldwell
TWIG
On Wed, Aug 27, 2014 at 9:13 AM, Laurie Frederiksen <laurie@bivio.biz> wrote:
What rules has your club set up in your partnership agreement or operating procedures for making decisions? You'll need to follow those rules to determine whether a decision is binding on all members if 5 out of 7 people agree to it.
Even if the decision is final for the current club, there is nothing wrong with the two people that want to continue participating in a club starting up a new one.
Or, as Bob pointed out, if 5 people want to leave the club, you don't necessarily have to vote to disband it entirely. If you have more than 1 person working together at a business, it is a partnership. You could certainly continue an investment group with only 2 people in it if it worked for those two people.
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
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