My club has to reduce its size every December to avoid a partnership fee in NJ. Last year we decided to distribute shares of Apple to our members in proportion to our club ownership. Each member was required to open an account with the club's broker to receive the shares. A letter of intent was sent to the broker in mid-December with instructions to transfer shares from a specific lot of Apple to each member's account. The actual transfers were made in early January 2021.
Here it is in December 2021 and I notified our members that we would be repeating the exercise. I provided the account numbers shown on the January broker statement as having received the shares and asked each member to confirm that the account was correct and still open. One member said that his account number was wrong and that he had never received the 2020 distribution. After an hour on the phone with the broker, we determined that the broker made the error (one digit off on the account number - the Letter of Intent had the correct account number). Now they're trying to determine how they will rectify the issue.
Stay tuned.
Ira Smilovitz
V Johnson on
Ira,
Thank you for sharing this information. Please let us know the size limitation for avoiding NJ fees!
My club has to reduce its size every December to avoid a partnership fee in NJ. Last year we decided to distribute shares of Apple to our members in proportion to our club ownership. Each member was required to open an account with the club's broker to receive the shares. A letter of intent was sent to the broker in mid-December with instructions to transfer shares from a specific lot of Apple to each member's account. The actual transfers were made in early January 2021.
Here it is in December 2021 and I notified our members that we would be repeating the exercise. I provided the account numbers shown on the January broker statement as having received the shares and asked each member to confirm that the account was correct and still open. One member said that his account number was wrong and that he had never received the 2020 distribution. After an hour on the phone with the broker, we determined that the broker made the error (one digit off on the account number - the Letter of Intent had the correct account number). Now they're trying to determine how they will rectify the issue.
My club has to reduce its size every December to avoid a partnership fee in NJ. Last year we decided to distribute shares of Apple to our members in proportion to our club ownership. Each member was required to open an account with the club's broker to receive the shares. A letter of intent was sent to the broker in mid-December with instructions to transfer shares from a specific lot of Apple to each member's account. The actual transfers were made in early January 2021.
Here it is in December 2021 and I notified our members that we would be repeating the exercise. I provided the account numbers shown on the January broker statement as having received the shares and asked each member to confirm that the account was correct and still open. One member said that his account number was wrong and that he had never received the 2020 distribution. After an hour on the phone with the broker, we determined that the broker made the error (one digit off on the account number - the Letter of Intent had the correct account number). Now they're trying to determine how they will rectify the issue.
Stay tuned.
Ira Smilovitz
Michelle on
Thanks Ira!
Sent from my iPhone
On Dec 13, 2021, at 11:49 AM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
Always check every transaction for accuracy.
My club has to reduce its size every December to avoid a partnership fee in NJ. Last year we decided to distribute shares of Apple to our members in proportion to our club ownership. Each member was required to open an account with the club's broker to receive the shares. A letter of intent was sent to the broker in mid-December with instructions to transfer shares from a specific lot of Apple to each member's account. The actual transfers were made in early January 2021.
Here it is in December 2021 and I notified our members that we would be repeating the exercise. I provided the account numbers shown on the January broker statement as having received the shares and asked each member to confirm that the account was correct and still open. One member said that his account number was wrong and that he had never received the 2020 distribution. After an hour on the phone with the broker, we determined that the broker made the error (one digit off on the account number - the Letter of Intent had the correct account number). Now they're trying to determine how they will rectify the issue.
Stay tuned.
Ira Smilovitz
ira smilovitz on
The threshhold for NJ changes every year. For 2021 you need to have less than $363,300 in total and an average of less than $50,900 per member.. NJ is the only state that has this requirement. If you exceed the limits, the club must pay $150/member to the state.
My club has to reduce its size every December to avoid a partnership fee in NJ. Last year we decided to distribute shares of Apple to our members in proportion to our club ownership. Each member was required to open an account with the club's broker to receive the shares. A letter of intent was sent to the broker in mid-December with instructions to transfer shares from a specific lot of Apple to each member's account. The actual transfers were made in early January 2021.
Here it is in December 2021 and I notified our members that we would be repeating the exercise. I provided the account numbers shown on the January broker statement as having received the shares and asked each member to confirm that the account was correct and still open. One member said that his account number was wrong and that he had never received the 2020 distribution. After an hour on the phone with the broker, we determined that the broker made the error (one digit off on the account number - the Letter of Intent had the correct account number). Now they're trying to determine how they will rectify the issue.
Stay tuned.
Ira Smilovitz
gayleff on
What if the club is less than the NJ Threshold, but a member has more than$50,000.
-----Original Message-----
From: ira smilovitz via bivio.com <user*2883400001@bivio.com>
To: club_cafe@bivio.com
Sent: Mon, Dec 13, 2021 1:07 pm
Subject: Re: [club_cafe] A cautionary tale of woe
The threshhold for NJ changes every year. For 2021 you need to have less than $363,300 in total and an average of less than $50,900 per member.. NJ is the only state that has this requirement. If you exceed the limits, the club must pay $150/member to the state.
My club has to reduce its size every December to avoid a partnership fee in NJ. Last year we decided to distribute shares of Apple to our members in proportion to our club ownership. Each member was required to open an account with the club's broker to receive the shares. A letter of intent was sent to the broker in mid-December with instructions to transfer shares from a specific lot of Apple to each member's account. The actual transfers were made in early January 2021.
Here it is in December 2021 and I notified our members that we would be repeating the exercise. I provided the account numbers shown on the January broker statement as having received the shares and asked each member to confirm that the account was correct and still open. One member said that his account number was wrong and that he had never received the 2020 distribution. After an hour on the phone with the broker, we determined that the broker made the error (one digit off on the account number - the Letter of Intent had the correct account number). Now they're trying to determine how they will rectify the issue.
Stay tuned.
Ira Smilovitz
ira smilovitz on
Gayle,
A single member with more than $50,900 is okay as long as the average member's value is less than $50,900.
What if the club is less than the NJ Threshold, but a member has more than$50,000.
-----Original Message-----
From: ira smilovitz via bivio.com <user*2883400001@bivio.com>
To: club_cafe@bivio.com
Sent: Mon, Dec 13, 2021 1:07 pm
Subject: Re: [club_cafe] A cautionary tale of woe
The threshhold for NJ changes every year. For 2021 you need to have less than $363,300 in total and an average of less than $50,900 per member.. NJ is the only state that has this requirement. If you exceed the limits, the club must pay $150/member to the state.
My club has to reduce its size every December to avoid a partnership fee in NJ. Last year we decided to distribute shares of Apple to our members in proportion to our club ownership. Each member was required to open an account with the club's broker to receive the shares. A letter of intent was sent to the broker in mid-December with instructions to transfer shares from a specific lot of Apple to each member's account. The actual transfers were made in early January 2021.
Here it is in December 2021 and I notified our members that we would be repeating the exercise. I provided the account numbers shown on the January broker statement as having received the shares and asked each member to confirm that the account was correct and still open. One member said that his account number was wrong and that he had never received the 2020 distribution. After an hour on the phone with the broker, we determined that the broker made the error (one digit off on the account number - the Letter of Intent had the correct account number). Now they're trying to determine how they will rectify the issue.
What if the club is less than the NJ Threshold, but a member has more than$50,000.
-----Original Message-----
From: ira smilovitz via bivio.com <user*2883400001@bivio.com>
To: club_cafe@bivio.com
Sent: Mon, Dec 13, 2021 1:07 pm
Subject: Re: [club_cafe] A cautionary tale of woe
The threshhold for NJ changes every year. For 2021 you need to have less than $363,300 in total and an average of less than $50,900 per member.. NJ is the only state that has this requirement. If you exceed the limits, the club must pay $150/member to the state.
My club has to reduce its size every December to avoid a partnership fee in NJ. Last year we decided to distribute shares of Apple to our members in proportion to our club ownership. Each member was required to open an account with the club's broker to receive the shares. A letter of intent was sent to the broker in mid-December with instructions to transfer shares from a specific lot of Apple to each member's account. The actual transfers were made in early January 2021.
Here it is in December 2021 and I notified our members that we would be repeating the exercise. I provided the account numbers shown on the January broker statement as having received the shares and asked each member to confirm that the account was correct and still open. One member said that his account number was wrong and that he had never received the 2020 distribution. After an hour on the phone with the broker, we determined that the broker made the error (one digit off on the account number - the Letter of Intent had the correct account number). Now they're trying to determine how they will rectify the issue.
Stay tuned.
Ira Smilovitz
ira smilovitz on
Some of the rules are tricky. If a club wants to know if they are subject to the NJ Partnership Filing Fee they can send a request to support@bivio.com. The NJ tax software provided by bivio correctly determines when a club is subject to the fee.
What if the club is less than the NJ Threshold, but a member has more than$50,000.
-----Original Message-----
From: ira smilovitz via bivio.com <user*2883400001@bivio.com>
To: club_cafe@bivio.com
Sent: Mon, Dec 13, 2021 1:07 pm
Subject: Re: [club_cafe] A cautionary tale of woe
The threshhold for NJ changes every year. For 2021 you need to have less than $363,300 in total and an average of less than $50,900 per member.. NJ is the only state that has this requirement. If you exceed the limits, the club must pay $150/member to the state.
My club has to reduce its size every December to avoid a partnership fee in NJ. Last year we decided to distribute shares of Apple to our members in proportion to our club ownership. Each member was required to open an account with the club's broker to receive the shares. A letter of intent was sent to the broker in mid-December with instructions to transfer shares from a specific lot of Apple to each member's account. The actual transfers were made in early January 2021.
Here it is in December 2021 and I notified our members that we would be repeating the exercise. I provided the account numbers shown on the January broker statement as having received the shares and asked each member to confirm that the account was correct and still open. One member said that his account number was wrong and that he had never received the 2020 distribution. After an hour on the phone with the broker, we determined that the broker made the error (one digit off on the account number - the Letter of Intent had the correct account number). Now they're trying to determine how they will rectify the issue.