My club just had one of the founding members leave the club. He offered, and we considered, transferring stocks to him. In the end it was agreed to have the club sell the stocks in January and we will all pay our share of the taxes in April 2022. We are hedging that long term gains will be taxed lower at this time as opposed to 10 or 20 years from now. As treasurer, I made sure everyone understood the options and impact of the decision. I'm including the ytd Capitol gains on the monthly reports. With the taxes due 15 months from now, I've got time to plan for that.
Lee Weygandt
Market Miners Investment Club
On Mar 7, 2021, at 9:46 PM, Carole Jansen via bivio.com <user*8441200001@bivio.com> wrote:
I am the oldest person in my club and the financial hit from a cash withdrawal can really impact my retirement plans, and sometimes can increase the cost of my Medicare. I have asked the members of my club to let me know if they plan on any voluntary withdrawals as soon as they can so I can adjust my tax plan, and hopefully to do withdrawals earlier in the year rather than later.
Of course, you can't plan for members passing away, but the silver lining is that the tax hit now increases the cost basis for your remaining share.
I have been a long time member of Poors Pupils for many years. In the last couple of years we have had members pass away who have also been members for many years with assets of well over $100,000.00. We have been a successful club and were able to sell stock to pay our members families the amount they were valued.
When the stocks are sold the money goes into our club treasury, we then write a check to the family. Now, I realize me personally is being hit with a large tax bill, without me having any benefit of the money that was gained from the selling of the stocks.
What advice can you give me and other members of our club, there are just a couple that have invested a lot of money and I really do not want to have a large tax implication, if I do not realize a benefit. The members that have passed away, do not pay as much in taxes as I, a survivor with no financial benefits. I have a financial burden through no fault of my own.
Could you comment on this situation.
Diana Evans
Rebo Reeves on
The two clubs that I am treasurer of feel it is unfair for all members to have to pay capital gains on another member's investment. We see how much gains the withdrawing member has and transfer stocks to that member with approximately the same gains. The withdrawing member opens a stock account with our broker so the transfer is simple. The adjustment amounts are paid in cash.
My club just had one of the founding members leave the club. He offered, and we considered, transferring stocks to him. In the end it was agreed to have the club sell the stocks in January and we will all pay our share of the taxes in April 2022. We are hedging that long term gains will be taxed lower at this time as opposed to 10 or 20 years from now. As treasurer, I made sure everyone understood the options and impact of the decision. I'm including the ytd Capitol gains on the monthly reports. With the taxes due 15 months from now, I've got time to plan for that.
I am the oldest person in my club and the financial hit from a cash withdrawal can really impact my retirement plans, and sometimes can increase the cost of my Medicare. I have asked the members of my club to let me know if they plan on any voluntary withdrawals as soon as they can so I can adjust my tax plan, and hopefully to do withdrawals earlier in the year rather than later.
Of course, you can't plan for members passing away, but the silver lining is that the tax hit now increases the cost basis for your remaining share.
I have been a long time member of Poors Pupils for many years. In the last couple of years we have had members pass away who have also been members for many years with assets of well over $100,000.00. We have been a successful club and were able to sell stock to pay our members families the amount they were valued.
When the stocks are sold the money goes into our club treasury, we then write a check to the family. Now, I realize me personally is being hit with a large tax bill, without me having any benefit of the money that was gained from the selling of the stocks.
What advice can you give me and other members of our club, there are just a couple that have invested a lot of money and I really do not want to have a large tax implication, if I do not realize a benefit. The members that have passed away, do not pay as much in taxes as I, a survivor with no financial benefits. I have a financial burden through no fault of my own.
Could you comment on this situation.
Diana Evans
Laurie Frederiksen on
Nobody pays taxes on anyone else's investment.
When you transfer shares of stock to pay a withdrawal, it adjusts when the club and the withdrawing member pay taxes but it does not avoid taxes being paid by anyone.
This explains the tax consequences of paying a withdrawing member with stock for a full withdrawal:
The only cash that should be given a withdrawing member is the difference between what they are owed in the withdrawal (Calculated when you enter the withdrawal) and the market value (on the stock transfer valuation date you enter on the withdrawal form) of the stocks they receive.
Laurie Frederiksen Invest with your friends! www.bivio.com
The two clubs that I am treasurer of feel it is unfair for all members to have to pay capital gains on another member's investment. We see how much gains the withdrawing member has and transfer stocks to that member with approximately the same gains. The withdrawing member opens a stock account with our broker so the transfer is simple. The adjustment amounts are paid in cash.
My club just had one of the founding members leave the club. He offered, and we considered, transferring stocks to him. In the end it was agreed to have the club sell the stocks in January and we will all pay our share of the taxes in April 2022. We are hedging that long term gains will be taxed lower at this time as opposed to 10 or 20 years from now. As treasurer, I made sure everyone understood the options and impact of the decision. I'm including the ytd Capitol gains on the monthly reports. With the taxes due 15 months from now, I've got time to plan for that.
I am the oldest person in my club and the financial hit from a cash withdrawal can really impact my retirement plans, and sometimes can increase the cost of my Medicare. I have asked the members of my club to let me know if they plan on any voluntary withdrawals as soon as they can so I can adjust my tax plan, and hopefully to do withdrawals earlier in the year rather than later.
Of course, you can't plan for members passing away, but the silver lining is that the tax hit now increases the cost basis for your remaining share.
I have been a long time member of Poors Pupils for many years. In the last couple of years we have had members pass away who have also been members for many years with assets of well over $100,000.00. We have been a successful club and were able to sell stock to pay our members families the amount they were valued.
When the stocks are sold the money goes into our club treasury, we then write a check to the family. Now, I realize me personally is being hit with a large tax bill, without me having any benefit of the money that was gained from the selling of the stocks.
What advice can you give me and other members of our club, there are just a couple that have invested a lot of money and I really do not want to have a large tax implication, if I do not realize a benefit. The members that have passed away, do not pay as much in taxes as I, a survivor with no financial benefits. I have a financial burden through no fault of my own.
Could you comment on this situation.
Diana Evans
Donna OConnnell on
Hi Laurie
Thank you for providing helpful information to the members that are on this email list.
On Mon, Aug 30, 2021 at 1:14 PM Laurie Frederiksen <laurie@bivio.biz> wrote:
Nobody pays taxes on anyone else's investment.
When you transfer shares of stock to pay a withdrawal, it adjusts when the club and the withdrawing member pay taxes but it does not avoid taxes being paid by anyone.
This explains the tax consequences of paying a withdrawing member with stock for a full withdrawal:
The only cash that should be given a withdrawing member is the difference between what they are owed in the withdrawal (Calculated when you enter the withdrawal) and the market value (on the stock transfer valuation date you enter on the withdrawal form) of the stocks they receive.
Laurie Frederiksen Invest with your friends! www.bivio.com
The two clubs that I am treasurer of feel it is unfair for all members to have to pay capital gains on another member's investment. We see how much gains the withdrawing member has and transfer stocks to that member with approximately the same gains. The withdrawing member opens a stock account with our broker so the transfer is simple. The adjustment amounts are paid in cash.
My club just had one of the founding members leave the club. He offered, and we considered, transferring stocks to him. In the end it was agreed to have the club sell the stocks in January and we will all pay our share of the taxes in April 2022. We are hedging that long term gains will be taxed lower at this time as opposed to 10 or 20 years from now. As treasurer, I made sure everyone understood the options and impact of the decision. I'm including the ytd Capitol gains on the monthly reports. With the taxes due 15 months from now, I've got time to plan for that.
I am the oldest person in my club and the financial hit from a cash withdrawal can really impact my retirement plans, and sometimes can increase the cost of my Medicare. I have asked the members of my club to let me know if they plan on any voluntary withdrawals as soon as they can so I can adjust my tax plan, and hopefully to do withdrawals earlier in the year rather than later.
Of course, you can't plan for members passing away, but the silver lining is that the tax hit now increases the cost basis for your remaining share.
I have been a long time member of Poors Pupils for many years. In the last couple of years we have had members pass away who have also been members for many years with assets of well over $100,000.00. We have been a successful club and were able to sell stock to pay our members families the amount they were valued.
When the stocks are sold the money goes into our club treasury, we then write a check to the family. Now, I realize me personally is being hit with a large tax bill, without me having any benefit of the money that was gained from the selling of the stocks.
What advice can you give me and other members of our club, there are just a couple that have invested a lot of money and I really do not want to have a large tax implication, if I do not realize a benefit. The members that have passed away, do not pay as much in taxes as I, a survivor with no financial benefits. I have a financial burden through no fault of my own.
Could you comment on this situation.
Diana Evans
--
Donna O'Connell
Jeff Rauch on
Norm,
Ted & Richard withdrew before this year, so there tax impacts are history. Marge and John withdrew in the last couple months, so there tax impact will be in this year.
I may have a rough idea of members tax hit by next meeting, but it will probably be shortly after that.
Marge's net profit was $2220
John's net profit was $4645, before he withdrew he had ~30% of the club's value.
Hope this helps with your question.
Let me know if you need more.
Jeff
Sent from my iPhone
On Aug 30, 2021, at 4:14 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Nobody pays taxes on anyone else's investment.
When you transfer shares of stock to pay a withdrawal, it adjusts when the club and the withdrawing member pay taxes but it does not avoid taxes being paid by anyone.
This explains the tax consequences of paying a withdrawing member with stock for a full withdrawal:
The only cash that should be given a withdrawing member is the difference between what they are owed in the withdrawal (Calculated when you enter the withdrawal) and the market value (on the stock transfer valuation date you enter on the withdrawal form) of the stocks they receive.
Laurie Frederiksen Invest with your friends! www.bivio.com
The two clubs that I am treasurer of feel it is unfair for all members to have to pay capital gains on another member's investment. We see how much gains the withdrawing member has and transfer stocks to that member with approximately the same gains. The withdrawing member opens a stock account with our broker so the transfer is simple. The adjustment amounts are paid in cash.
My club just had one of the founding members leave the club. He offered, and we considered, transferring stocks to him. In the end it was agreed to have the club sell the stocks in January and we will all pay our share of the taxes in April 2022. We are hedging that long term gains will be taxed lower at this time as opposed to 10 or 20 years from now. As treasurer, I made sure everyone understood the options and impact of the decision. I'm including the ytd Capitol gains on the monthly reports. With the taxes due 15 months from now, I've got time to plan for that.
I am the oldest person in my club and the financial hit from a cash withdrawal can really impact my retirement plans, and sometimes can increase the cost of my Medicare. I have asked the members of my club to let me know if they plan on any voluntary withdrawals as soon as they can so I can adjust my tax plan, and hopefully to do withdrawals earlier in the year rather than later.
Of course, you can't plan for members passing away, but the silver lining is that the tax hit now increases the cost basis for your remaining share.
I have been a long time member of Poors Pupils for many years. In the last couple of years we have had members pass away who have also been members for many years with assets of well over $100,000.00. We have been a successful club and were able to sell stock to pay our members families the amount they were valued.
When the stocks are sold the money goes into our club treasury, we then write a check to the family. Now, I realize me personally is being hit with a large tax bill, without me having any benefit of the money that was gained from the selling of the stocks.
What advice can you give me and other members of our club, there are just a couple that have invested a lot of money and I really do not want to have a large tax implication, if I do not realize a benefit. The members that have passed away, do not pay as much in taxes as I, a survivor with no financial benefits. I have a financial burden through no fault of my own.
Could you comment on this situation.
Diana Evans
Laurie Frederiksen on
To Jeff:
Just so you know, you sent your response to Club Cafe, not to Norm. You might want to check the email address and resend it.
To Jeff and everyone else who might be interested:
Just so you also know, the gain or loss realized on a members withdrawal is shown on their withdrawal report which you can find if you go to Accounting>Reports>Withdrawal Reports.
It is not calculated some other way.
Laurie Frederiksen Invest with your friends! www.bivio.com
Ted & Richard withdrew before this year, so there tax impacts are history. Marge and John withdrew in the last couple months, so there tax impact will be in this year.
I may have a rough idea of members tax hit by next meeting, but it will probably be shortly after that.
Marge's net profit was $2220
John's net profit was $4645, before he withdrew he had ~30% of the club's value.
Hope this helps with your question.
Let me know if you need more.
Jeff
Sent from my iPhone
On Aug 30, 2021, at 4:14 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Nobody pays taxes on anyone else's investment.
When you transfer shares of stock to pay a withdrawal, it adjusts when the club and the withdrawing member pay taxes but it does not avoid taxes being paid by anyone.
This explains the tax consequences of paying a withdrawing member with stock for a full withdrawal:
The only cash that should be given a withdrawing member is the difference between what they are owed in the withdrawal (Calculated when you enter the withdrawal) and the market value (on the stock transfer valuation date you enter on the withdrawal form) of the stocks they receive.
Laurie Frederiksen Invest with your friends! www.bivio.com
The two clubs that I am treasurer of feel it is unfair for all members to have to pay capital gains on another member's investment. We see how much gains the withdrawing member has and transfer stocks to that member with approximately the same gains. The withdrawing member opens a stock account with our broker so the transfer is simple. The adjustment amounts are paid in cash.
My club just had one of the founding members leave the club. He offered, and we considered, transferring stocks to him. In the end it was agreed to have the club sell the stocks in January and we will all pay our share of the taxes in April 2022. We are hedging that long term gains will be taxed lower at this time as opposed to 10 or 20 years from now. As treasurer, I made sure everyone understood the options and impact of the decision. I'm including the ytd Capitol gains on the monthly reports. With the taxes due 15 months from now, I've got time to plan for that.
I am the oldest person in my club and the financial hit from a cash withdrawal can really impact my retirement plans, and sometimes can increase the cost of my Medicare. I have asked the members of my club to let me know if they plan on any voluntary withdrawals as soon as they can so I can adjust my tax plan, and hopefully to do withdrawals earlier in the year rather than later.
Of course, you can't plan for members passing away, but the silver lining is that the tax hit now increases the cost basis for your remaining share.
I have been a long time member of Poors Pupils for many years. In the last couple of years we have had members pass away who have also been members for many years with assets of well over $100,000.00. We have been a successful club and were able to sell stock to pay our members families the amount they were valued.
When the stocks are sold the money goes into our club treasury, we then write a check to the family. Now, I realize me personally is being hit with a large tax bill, without me having any benefit of the money that was gained from the selling of the stocks.
What advice can you give me and other members of our club, there are just a couple that have invested a lot of money and I really do not want to have a large tax implication, if I do not realize a benefit. The members that have passed away, do not pay as much in taxes as I, a survivor with no financial benefits. I have a financial burden through no fault of my own.
Could you comment on this situation.
Diana Evans
John Rice on
WOW!!! Maybe it should be a requirement that every club treasurer takes and passes a course on club investing. So much confusion and wrong thinking in the above emails. Club members are getting screwed because the treasurer doesn't understand the tax implications.
John Rice
ABODI Investment Club
On Tue, Aug 31, 2021 at 9:41 AM Laurie Frederiksen <laurie@bivio.biz> wrote:
To Jeff:
Just so you know, you sent your response to Club Cafe, not to Norm. You might want to check the email address and resend it.
To Jeff and everyone else who might be interested:
Just so you also know, the gain or loss realized on a members withdrawal is shown on their withdrawal report which you can find if you go to Accounting>Reports>Withdrawal Reports.
It is not calculated some other way.
Laurie Frederiksen Invest with your friends! www.bivio.com
Ted & Richard withdrew before this year, so there tax impacts are history. Marge and John withdrew in the last couple months, so there tax impact will be in this year.
I may have a rough idea of members tax hit by next meeting, but it will probably be shortly after that.
Marge's net profit was $2220
John's net profit was $4645, before he withdrew he had ~30% of the club's value.
Hope this helps with your question.
Let me know if you need more.
Jeff
Sent from my iPhone
On Aug 30, 2021, at 4:14 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Nobody pays taxes on anyone else's investment.
When you transfer shares of stock to pay a withdrawal, it adjusts when the club and the withdrawing member pay taxes but it does not avoid taxes being paid by anyone.
This explains the tax consequences of paying a withdrawing member with stock for a full withdrawal:
The only cash that should be given a withdrawing member is the difference between what they are owed in the withdrawal (Calculated when you enter the withdrawal) and the market value (on the stock transfer valuation date you enter on the withdrawal form) of the stocks they receive.
Laurie Frederiksen Invest with your friends! www.bivio.com
The two clubs that I am treasurer of feel it is unfair for all members to have to pay capital gains on another member's investment. We see how much gains the withdrawing member has and transfer stocks to that member with approximately the same gains. The withdrawing member opens a stock account with our broker so the transfer is simple. The adjustment amounts are paid in cash.
My club just had one of the founding members leave the club. He offered, and we considered, transferring stocks to him. In the end it was agreed to have the club sell the stocks in January and we will all pay our share of the taxes in April 2022. We are hedging that long term gains will be taxed lower at this time as opposed to 10 or 20 years from now. As treasurer, I made sure everyone understood the options and impact of the decision. I'm including the ytd Capitol gains on the monthly reports. With the taxes due 15 months from now, I've got time to plan for that.
I am the oldest person in my club and the financial hit from a cash withdrawal can really impact my retirement plans, and sometimes can increase the cost of my Medicare. I have asked the members of my club to let me know if they plan on any voluntary withdrawals as soon as they can so I can adjust my tax plan, and hopefully to do withdrawals earlier in the year rather than later.
Of course, you can't plan for members passing away, but the silver lining is that the tax hit now increases the cost basis for your remaining share.
I have been a long time member of Poors Pupils for many years. In the last couple of years we have had members pass away who have also been members for many years with assets of well over $100,000.00. We have been a successful club and were able to sell stock to pay our members families the amount they were valued.
When the stocks are sold the money goes into our club treasury, we then write a check to the family. Now, I realize me personally is being hit with a large tax bill, without me having any benefit of the money that was gained from the selling of the stocks.
What advice can you give me and other members of our club, there are just a couple that have invested a lot of money and I really do not want to have a large tax implication, if I do not realize a benefit. The members that have passed away, do not pay as much in taxes as I, a survivor with no financial benefits. I have a financial burden through no fault of my own.
Could you comment on this situation.
Diana Evans
Carole Jansen on
Just sayin'.....It would be nice if the club members did not totally rely on the club treasurer for this.....it would be helpful if they took the initiative to educate themselves about their own taxes. (Yes, that's right, I'm a Treasurer...for life. I love it when the club members don't rely on me for advice about everything preceded with a $.)
WOW!!! Maybe it should be a requirement that every club treasurer takes and passes a course on club investing. So much confusion and wrong thinking in the above emails. Club members are getting screwed because the treasurer doesn't understand the tax implications.
John Rice
ABODI Investment Club
On Tue, Aug 31, 2021 at 9:41 AM Laurie Frederiksen <laurie@bivio.biz> wrote:
To Jeff:
Just so you know, you sent your response to Club Cafe, not to Norm. You might want to check the email address and resend it.
To Jeff and everyone else who might be interested:
Just so you also know, the gain or loss realized on a members withdrawal is shown on their withdrawal report which you can find if you go to Accounting>Reports>Withdrawal Reports.
It is not calculated some other way.
Laurie Frederiksen Invest with your friends! www.bivio.com
Ted & Richard withdrew before this year, so there tax impacts are history. Marge and John withdrew in the last couple months, so there tax impact will be in this year.
I may have a rough idea of members tax hit by next meeting, but it will probably be shortly after that.
Marge's net profit was $2220
John's net profit was $4645, before he withdrew he had ~30% of the club's value.
Hope this helps with your question.
Let me know if you need more.
Jeff
Sent from my iPhone
On Aug 30, 2021, at 4:14 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Nobody pays taxes on anyone else's investment.
When you transfer shares of stock to pay a withdrawal, it adjusts when the club and the withdrawing member pay taxes but it does not avoid taxes being paid by anyone.
This explains the tax consequences of paying a withdrawing member with stock for a full withdrawal:
The only cash that should be given a withdrawing member is the difference between what they are owed in the withdrawal (Calculated when you enter the withdrawal) and the market value (on the stock transfer valuation date you enter on the withdrawal form) of the stocks they receive.
Laurie Frederiksen Invest with your friends! www.bivio.com
The two clubs that I am treasurer of feel it is unfair for all members to have to pay capital gains on another member's investment. We see how much gains the withdrawing member has and transfer stocks to that member with approximately the same gains. The withdrawing member opens a stock account with our broker so the transfer is simple. The adjustment amounts are paid in cash.
My club just had one of the founding members leave the club. He offered, and we considered, transferring stocks to him. In the end it was agreed to have the club sell the stocks in January and we will all pay our share of the taxes in April 2022. We are hedging that long term gains will be taxed lower at this time as opposed to 10 or 20 years from now. As treasurer, I made sure everyone understood the options and impact of the decision. I'm including the ytd Capitol gains on the monthly reports. With the taxes due 15 months from now, I've got time to plan for that.
I am the oldest person in my club and the financial hit from a cash withdrawal can really impact my retirement plans, and sometimes can increase the cost of my Medicare. I have asked the members of my club to let me know if they plan on any voluntary withdrawals as soon as they can so I can adjust my tax plan, and hopefully to do withdrawals earlier in the year rather than later.
Of course, you can't plan for members passing away, but the silver lining is that the tax hit now increases the cost basis for your remaining share.
I have been a long time member of Poors Pupils for many years. In the last couple of years we have had members pass away who have also been members for many years with assets of well over $100,000.00. We have been a successful club and were able to sell stock to pay our members families the amount they were valued.
When the stocks are sold the money goes into our club treasury, we then write a check to the family. Now, I realize me personally is being hit with a large tax bill, without me having any benefit of the money that was gained from the selling of the stocks.
What advice can you give me and other members of our club, there are just a couple that have invested a lot of money and I really do not want to have a large tax implication, if I do not realize a benefit. The members that have passed away, do not pay as much in taxes as I, a survivor with no financial benefits. I have a financial burden through no fault of my own.
Could you comment on this situation.
Diana Evans
John W Ranby Trustee PGM Cariboo Trust on
Thank you, Carole, for your response. You said it much more
diplomatically than my response was going to be.
No one is being "screwed." Whether to pay taxes on gains now
or later is "better" is a decision unique to each person's
tax situation and stage of life. Every member bears
responsibility to understand the impact of both choices.
Also a treasurer.
Jack
John Rice on
Sorry, using the word "screwed" was not a good choice of words. From a few of the posts some people were forced to pay capital gains taxes early even though they wouldn't have made that decision themselves. It could financially hurt them if they were not in a good financial position at that time.
John
On Tue, Aug 31, 2021 at 4:56 PM John W Ranby Trustee PGM Cariboo Trust via bivio.com <user*15792700001@bivio.com> wrote:
Thank you, Carole, for your response. You said it much more
diplomatically than my response was going to be.
No one is being "screwed." Whether to pay taxes on gains now
or later is "better" is a decision unique to each person's
tax situation and stage of life. Every member bears
responsibility to understand the impact of both choices.
Also a treasurer.
Jack
Peter Dunkelberger on
It seems to me that if a large number of partners in a club would be negatively financially affected by large capital gains taxes, the partnership can make a distribution to assist in payment of those taxes, or the individual partners can take a partial distribution. Either way, the partnership agreement has to include the provision for partial distributions. That frequently happens in regular business partnerships. Of course, if the partnership has to further liquidate holdings to make a partial distribution, then there will be more taxes, but the tax rate is never 100%.
Sorry, using the word "screwed" was not a good choice of words. From a few of the posts some people were forced to pay capital gains taxes early even though they wouldn't have made that decision themselves. It could financially hurt them if they were not in a good financial position at that time.
John
On Tue, Aug 31, 2021 at 4:56 PM John W Ranby Trustee PGM Cariboo Trust via bivio.com <user*15792700001@bivio.com> wrote:
Thank you, Carole, for your response. You said it much more
diplomatically than my response was going to be.
No one is being "screwed." Whether to pay taxes on gains now
or later is "better" is a decision unique to each person's
tax situation and stage of life. Every member bears
responsibility to understand the impact of both choices.
Also a treasurer.
Jack
Laurie Frederiksen on
Two points for this discussion:
1. You cannot make up how the taxation of a withdrawal payout will work. It works like it works in bivio.
2. The stock market has been doing very well for a while so a lot of you have a lot of gains in your investments. Gains are taxable, but you're still ending up with much more than what you started with. It's a nice problem to have.
There are very few ways to avoid being taxed on those gains forever. The best you can probably do is to control when you are taxed on them. That gives you the ability to decide the most optimal time to be taxed. The most optimal time will be different for each member of your club. It depends on each person's personal tax situation.
The control of when the gains will be taxed is what you get when you pay a full withdrawal with stock. It does not help you avoid paying taxes.
Laurie Frederiksen Invest with your friends! www.bivio.com
It seems to me that if a large number of partners in a club would be negatively financially affected by large capital gains taxes, the partnership can make a distribution to assist in payment of those taxes, or the individual partners can take a partial distribution. Either way, the partnership agreement has to include the provision for partial distributions. That frequently happens in regular business partnerships. Of course, if the partnership has to further liquidate holdings to make a partial distribution, then there will be more taxes, but the tax rate is never 100%.
Sorry, using the word "screwed" was not a good choice of words. From a few of the posts some people were forced to pay capital gains taxes early even though they wouldn't have made that decision themselves. It could financially hurt them if they were not in a good financial position at that time.
John
On Tue, Aug 31, 2021 at 4:56 PM John W Ranby Trustee PGM Cariboo Trust via bivio.com <user*15792700001@bivio.com> wrote:
Thank you, Carole, for your response. You said it much more
diplomatically than my response was going to be.
No one is being "screwed." Whether to pay taxes on gains now
or later is "better" is a decision unique to each person's
tax situation and stage of life. Every member bears
responsibility to understand the impact of both choices.
Also a treasurer.
Jack
egussin on
Good response Laurie to the thread that has been going on!
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Laurie Frederiksen Sent: Wednesday, September 1, 2021 9:09 AM To: The Club Cafe <club_cafe@bivio.com> Subject: Re: [club_cafe] Re: Bivio tax question
Two points for this discussion:
1. You cannot make up how the taxation of a withdrawal payout will work. It works like it works in bivio.
2. The stock market has been doing very well for a while so a lot of you have a lot of gains in your investments. Gains are taxable, but you're still ending up with much more than what you started with. It's a nice problem to have.
There are very few ways to avoid being taxed on those gains forever. The best you can probably do is to control when you are taxed on them. That gives you the ability to decide the most optimal time to be taxed. The most optimal time will be different for each member of your club. It depends on each person's personal tax situation.
The control of when the gains will be taxed is what you get when you pay a full withdrawal with stock. It does not help you avoid paying taxes.
Laurie Frederiksen Invest with your friends! www.bivio.com
It seems to me that if a large number of partners in a club would be negatively financially affected by large capital gains taxes, the partnership can make a distribution to assist in payment of those taxes, or the individual partners can take a partial distribution. Either way, the partnership agreement has to include the provision for partial distributions. That frequently happens in regular business partnerships. Of course, if the partnership has to further liquidate holdings to make a partial distribution, then there will be more taxes, but the tax rate is never 100%.
Sorry, using the word "screwed" was not a good choice of words. From a few of the posts some people were forced to pay capital gains taxes early even though they wouldn't have made that decision themselves. It could financially hurt them if they were not in a good financial position at that time.
John
On Tue, Aug 31, 2021 at 4:56 PM John W Ranby Trustee PGM Cariboo Trust via bivio.com <user*15792700001@bivio.com> wrote:
Thank you, Carole, for your response. You said it much more diplomatically than my response was going to be.
No one is being "screwed." Whether to pay taxes on gains now or later is "better" is a decision unique to each person's tax situation and stage of life. Every member bears responsibility to understand the impact of both choices. Also a treasurer. Jack