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Withdrawals and taxes
Dan,
Look at the way it is filled out with my FUNNY NUMBERS.

On Friday, September 29, 2023 at 03:55:01 PM PDT, Dan Cohn via bivio.com <user*32501700001@bivio.com> wrote:


but is that from Schwab from an investment account to another brokerage account?

On Fri, Sep 29, 2023 at 6:51 PM Penny Foy via bivio.com <user*35905200001@bivio.com> wrote:
You can transfer stock on Schwab.com - calling the 800 number with their form - we've done it several times.

Penny Foy 

Sent from my iPhone Penny Foy 319-432-1998

On Sep 29, 2023, at 2:50 PM, Dan Cohn via bivio.com <user*32501700001@bivio.com> wrote:


Went by local Schwab office today; after a lot of checking they will not transfer stock outside of Schwab!

On Fri, Sep 29, 2023 at 3:34 PM Judy Simonson via bivio.com <user*29968200001@bivio.com> wrote:
This is great news!  Can you share more details as to what forms you file or process you use to transfer stocks to withdrawing members.

Thanks,
Judy

On Sep 29, 2023, at 11:15 AM, Donna OConnnell via bivio.com <user*23240500001@bivio.com> wrote:

My investment club uses Schwab
We transfer stocks to a withdrawing members personal Schwab account. 

On Fri, Sep 29, 2023, 6:44 AM Judy Simonson via bivio.com <user*29968200001@bivio.com> wrote:
I believe Fidelity allows stock transfers to club members. We are looking into these issues because we haven't been transferred yet. Also I know Siebert allows it but it doesn't offer as much stock research as TD, Schwab or Fidelity. 

I can't believe Schwab is still doing this to investment clubs!  Terrible policy. And some staff at Schwab know it!!

Judy

On Sep 29, 2023, at 8:28 AM, Maggie Distler via bivio.com <user*9437600001@bivio.com> wrote:


I have also been following this thread.  We are looking to disband.  I have called Schwab 4 different times and have had 4 different versions of what we must do.  I finally had a gal tell me to call and ask for the Complex team. (they didn't come in until later, I had called to early for them) It took me awhile to get to them, the person I had on the phone thought they could handle it. I had to repeat myself a few times.  I was told during 2 of my 4 calls that as long as the person opened a Schwab account, stocks could be transferred. The person from the Complex team said the same and there is a form they have, which I printed out you put their Schwab account number on it and it contains how you want to send the stock. FIFO, etc.  One of reps asked if I had an actual office close to me, which I did not, they suggested going through them.  Good Luck

On Friday, September 29, 2023 at 08:15:05 AM EDT, John Grajczyk via bivio.com <user*36432700001@bivio.com> wrote:


I have been following these issues we are having and was wondering is there anyone else besides Schwab that we could deal with that operates like tdAmeritrade.  The distribution of assets or transfer of stocks upon a members departure and the capital gains reponsibilities is a big change for us.  Can anyone explain if this is just a Schwab policy?

On Fri, Sep 29, 2023, 7:34 AM SB via bivio.com <user*1595500001@bivio.com> wrote:
One can see the capital gains apportioned to each partner on the 'Member Tax Allocation Report'. Each partner will realize a gain/loss on assets that are sold in proportion to their interest in the partnership.
Scott


On Fri, Sep 29, 2023 at 7:21 AM Dan Cohn via bivio.com <user*32501700001@bivio.com> wrote:
We use Schwab and realized that when we sell stock in our club to give a withdrawing (deceased) member his percentage in cash; the total membership has to pay the capital gains tax! 

Our club is made up of "ROMEO's" and have been around for awhile so some of the withdrawals are large with good capital gains. So taxes are getting to be significant.

When K1's come out he is paying his capital gains. And so is the rest of the club!?!

What am I missing? Not understanding? Do about it?


ps Schwab does not allow us to transfer stock to a withdrawal member.


thanks
Dan Cohn
NAMC Investment Club #3



--
Dan Cohn
404 862 5640


--
Dan Cohn
404 862 5640
This is the same form we use - yes, you have to be sure to fill in all pertinent information and verify the account numbers you are transferring to.  We had an incorrect number due to human error in providing the number to me. 

Penny Foy 

Sent from my iPhone Penny Foy 319-432-1998

On Sep 29, 2023, at 5:53 PM, Kim Brown via bivio.com <user*19345700001@bivio.com> wrote:


Here is the form I will use to transfer our Schwab information to Fidelity.  I have filled some of the lines with funny information that I was coached to fill.  Hope this work for you.  Ira Smilovitz may know how this all works and this may not work for everyone the same.
Kim

On Friday, September 29, 2023 at 02:08:24 PM PDT, Donna OConnnell via bivio.com <user*23240500001@bivio.com> wrote:


Hi 
Here is the form that I use.

On Fri, Sep 29, 2023 at 12:34 PM Judy Simonson via bivio.com <user*29968200001@bivio.com> wrote:
This is great news!  Can you share more details as to what forms you file or process you use to transfer stocks to withdrawing members.

Thanks,
Judy

On Sep 29, 2023, at 11:15 AM, Donna OConnnell via bivio.com <user*23240500001@bivio.com> wrote:

My investment club uses Schwab
We transfer stocks to a withdrawing members personal Schwab account. 

On Fri, Sep 29, 2023, 6:44 AM Judy Simonson via bivio.com <user*29968200001@bivio.com> wrote:
I believe Fidelity allows stock transfers to club members. We are looking into these issues because we haven't been transferred yet. Also I know Siebert allows it but it doesn't offer as much stock research as TD, Schwab or Fidelity. 

I can't believe Schwab is still doing this to investment clubs!  Terrible policy. And some staff at Schwab know it!!

Judy

On Sep 29, 2023, at 8:28 AM, Maggie Distler via bivio.com <user*9437600001@bivio.com> wrote:


I have also been following this thread.  We are looking to disband.  I have called Schwab 4 different times and have had 4 different versions of what we must do.  I finally had a gal tell me to call and ask for the Complex team. (they didn't come in until later, I had called to early for them) It took me awhile to get to them, the person I had on the phone thought they could handle it. I had to repeat myself a few times.  I was told during 2 of my 4 calls that as long as the person opened a Schwab account, stocks could be transferred. The person from the Complex team said the same and there is a form they have, which I printed out you put their Schwab account number on it and it contains how you want to send the stock. FIFO, etc.  One of reps asked if I had an actual office close to me, which I did not, they suggested going through them.  Good Luck

On Friday, September 29, 2023 at 08:15:05 AM EDT, John Grajczyk via bivio.com <user*36432700001@bivio.com> wrote:


I have been following these issues we are having and was wondering is there anyone else besides Schwab that we could deal with that operates like tdAmeritrade.  The distribution of assets or transfer of stocks upon a members departure and the capital gains reponsibilities is a big change for us.  Can anyone explain if this is just a Schwab policy?

On Fri, Sep 29, 2023, 7:34 AM SB via bivio.com <user*1595500001@bivio.com> wrote:
One can see the capital gains apportioned to each partner on the 'Member Tax Allocation Report'. Each partner will realize a gain/loss on assets that are sold in proportion to their interest in the partnership.
Scott


On Fri, Sep 29, 2023 at 7:21 AM Dan Cohn via bivio.com <user*32501700001@bivio.com> wrote:
We use Schwab and realized that when we sell stock in our club to give a withdrawing (deceased) member his percentage in cash; the total membership has to pay the capital gains tax! 

Our club is made up of "ROMEO's" and have been around for awhile so some of the withdrawals are large with good capital gains. So taxes are getting to be significant.

When K1's come out he is paying his capital gains. And so is the rest of the club!?!

What am I missing? Not understanding? Do about it?


ps Schwab does not allow us to transfer stock to a withdrawal member.


thanks
Dan Cohn
NAMC Investment Club #3



--
Donna O'Connell
The thing that everyone needs to understand is that the rules are completely different for old, long time investment clubs versus the newly converted TD Ameritrade ones. 

Our club was TDA. We did not have a check book with TDA. We had the option but never requested checks. After the merger we requested checks from Schwab and they said they would not grandfather any features that we were not using beforehand. 

The Schwab representative will process third party payments to departing members by using their request form. They will make stock distribution to departing members but they must open a Schwab account in their own name. After the transfer the former member can move the shares to their own brokerage firm and close the Schwab account.

Those old Schwab investment club members that are responding to this thread are simply causing the new clubs a lot of stress because your rules don't apply to our new Schwab accounts. I have worked with the local Schwab office and we have spent several hours on the phone with corporate. That's how I know the old rules don't apply to new clubs. 

Randy Purvis
D & C Investment Club 
Established 1/2/1964


Sent from my iPhone

On Sep 29, 2023, at 7:02 PM, Penny Foy via bivio.com <user*35905200001@bivio.com> wrote:

This is the same form we use - yes, you have to be sure to fill in all pertinent information and verify the account numbers you are transferring to.  We had an incorrect number due to human error in providing the number to me. 

Penny Foy 

Sent from my iPhone Penny Foy 319-432-1998

On Sep 29, 2023, at 5:53 PM, Kim Brown via bivio.com <user*19345700001@bivio.com> wrote:


Here is the form I will use to transfer our Schwab information to Fidelity.  I have filled some of the lines with funny information that I was coached to fill.  Hope this work for you.  Ira Smilovitz may know how this all works and this may not work for everyone the same.
Kim

On Friday, September 29, 2023 at 02:08:24 PM PDT, Donna OConnnell via bivio.com <user*23240500001@bivio.com> wrote:


Hi 
Here is the form that I use.

On Fri, Sep 29, 2023 at 12:34 PM Judy Simonson via bivio.com <user*29968200001@bivio.com> wrote:
This is great news!  Can you share more details as to what forms you file or process you use to transfer stocks to withdrawing members.

Thanks,
Judy

On Sep 29, 2023, at 11:15 AM, Donna OConnnell via bivio.com <user*23240500001@bivio.com> wrote:

My investment club uses Schwab
We transfer stocks to a withdrawing members personal Schwab account. 

On Fri, Sep 29, 2023, 6:44 AM Judy Simonson via bivio.com <user*29968200001@bivio.com> wrote:
I believe Fidelity allows stock transfers to club members. We are looking into these issues because we haven't been transferred yet. Also I know Siebert allows it but it doesn't offer as much stock research as TD, Schwab or Fidelity. 

I can't believe Schwab is still doing this to investment clubs!  Terrible policy. And some staff at Schwab know it!!

Judy

On Sep 29, 2023, at 8:28 AM, Maggie Distler via bivio.com <user*9437600001@bivio.com> wrote:


I have also been following this thread.  We are looking to disband.  I have called Schwab 4 different times and have had 4 different versions of what we must do.  I finally had a gal tell me to call and ask for the Complex team. (they didn't come in until later, I had called to early for them) It took me awhile to get to them, the person I had on the phone thought they could handle it. I had to repeat myself a few times.  I was told during 2 of my 4 calls that as long as the person opened a Schwab account, stocks could be transferred. The person from the Complex team said the same and there is a form they have, which I printed out you put their Schwab account number on it and it contains how you want to send the stock. FIFO, etc.  One of reps asked if I had an actual office close to me, which I did not, they suggested going through them.  Good Luck

On Friday, September 29, 2023 at 08:15:05 AM EDT, John Grajczyk via bivio.com <user*36432700001@bivio.com> wrote:


I have been following these issues we are having and was wondering is there anyone else besides Schwab that we could deal with that operates like tdAmeritrade.  The distribution of assets or transfer of stocks upon a members departure and the capital gains reponsibilities is a big change for us.  Can anyone explain if this is just a Schwab policy?

On Fri, Sep 29, 2023, 7:34 AM SB via bivio.com <user*1595500001@bivio.com> wrote:
One can see the capital gains apportioned to each partner on the 'Member Tax Allocation Report'. Each partner will realize a gain/loss on assets that are sold in proportion to their interest in the partnership.
Scott


On Fri, Sep 29, 2023 at 7:21 AM Dan Cohn via bivio.com <user*32501700001@bivio.com> wrote:
We use Schwab and realized that when we sell stock in our club to give a withdrawing (deceased) member his percentage in cash; the total membership has to pay the capital gains tax! 

Our club is made up of "ROMEO's" and have been around for awhile so some of the withdrawals are large with good capital gains. So taxes are getting to be significant.

When K1's come out he is paying his capital gains. And so is the rest of the club!?!

What am I missing? Not understanding? Do about it?


ps Schwab does not allow us to transfer stock to a withdrawal member.


thanks
Dan Cohn
NAMC Investment Club #3



--
Donna O'Connell
<Schwab to Fidelity 2023.pdf>
That doesn't seem right that the rules would not be the same. 

We do not have a Schwab checkbook. We have a local account to handle cash transactions and transfer cash in or out of Schwab as needed.

The form can be used to transfer to other brokers, you just have to get the right information, from what they told me. 

Or - if the member doesn't have an account you can open an account with Schwab at no cost. 

I did multiple transfers both internal and external with that form. And I personally didn't have an account and I opened one with Schwab and transferred stock for a partial withdrawal for myself with no issue. 

I apologize if they are not letting you do that - there should be some type of resolution.

Penny Foy 

Sent from my iPhone Penny Foy 319-432-1998

On Sep 29, 2023, at 6:33 PM, Randy Purvis via bivio.com <user*37247600001@bivio.com> wrote:

The thing that everyone needs to understand is that the rules are completely different for old, long time investment clubs versus the newly converted TD Ameritrade ones. 

Our club was TDA. We did not have a check book with TDA. We had the option but never requested checks. After the merger we requested checks from Schwab and they said they would not grandfather any features that we were not using beforehand. 

The Schwab representative will process third party payments to departing members by using their request form. They will make stock distribution to departing members but they must open a Schwab account in their own name. After the transfer the former member can move the shares to their own brokerage firm and close the Schwab account.

Those old Schwab investment club members that are responding to this thread are simply causing the new clubs a lot of stress because your rules don't apply to our new Schwab accounts. I have worked with the local Schwab office and we have spent several hours on the phone with corporate. That's how I know the old rules don't apply to new clubs. 

Randy Purvis
D & C Investment Club 
Established 1/2/1964


Sent from my iPhone

On Sep 29, 2023, at 7:02 PM, Penny Foy via bivio.com <user*35905200001@bivio.com> wrote:

This is the same form we use - yes, you have to be sure to fill in all pertinent information and verify the account numbers you are transferring to.  We had an incorrect number due to human error in providing the number to me. 

Penny Foy 

Sent from my iPhone Penny Foy 319-432-1998

On Sep 29, 2023, at 5:53 PM, Kim Brown via bivio.com <user*19345700001@bivio.com> wrote:


Here is the form I will use to transfer our Schwab information to Fidelity.  I have filled some of the lines with funny information that I was coached to fill.  Hope this work for you.  Ira Smilovitz may know how this all works and this may not work for everyone the same.
Kim

On Friday, September 29, 2023 at 02:08:24 PM PDT, Donna OConnnell via bivio.com <user*23240500001@bivio.com> wrote:


Hi 
Here is the form that I use.

On Fri, Sep 29, 2023 at 12:34 PM Judy Simonson via bivio.com <user*29968200001@bivio.com> wrote:
This is great news!  Can you share more details as to what forms you file or process you use to transfer stocks to withdrawing members.

Thanks,
Judy

On Sep 29, 2023, at 11:15 AM, Donna OConnnell via bivio.com <user*23240500001@bivio.com> wrote:

My investment club uses Schwab
We transfer stocks to a withdrawing members personal Schwab account. 

On Fri, Sep 29, 2023, 6:44 AM Judy Simonson via bivio.com <user*29968200001@bivio.com> wrote:
I believe Fidelity allows stock transfers to club members. We are looking into these issues because we haven't been transferred yet. Also I know Siebert allows it but it doesn't offer as much stock research as TD, Schwab or Fidelity. 

I can't believe Schwab is still doing this to investment clubs!  Terrible policy. And some staff at Schwab know it!!

Judy

On Sep 29, 2023, at 8:28 AM, Maggie Distler via bivio.com <user*9437600001@bivio.com> wrote:


I have also been following this thread.  We are looking to disband.  I have called Schwab 4 different times and have had 4 different versions of what we must do.  I finally had a gal tell me to call and ask for the Complex team. (they didn't come in until later, I had called to early for them) It took me awhile to get to them, the person I had on the phone thought they could handle it. I had to repeat myself a few times.  I was told during 2 of my 4 calls that as long as the person opened a Schwab account, stocks could be transferred. The person from the Complex team said the same and there is a form they have, which I printed out you put their Schwab account number on it and it contains how you want to send the stock. FIFO, etc.  One of reps asked if I had an actual office close to me, which I did not, they suggested going through them.  Good Luck

On Friday, September 29, 2023 at 08:15:05 AM EDT, John Grajczyk via bivio.com <user*36432700001@bivio.com> wrote:


I have been following these issues we are having and was wondering is there anyone else besides Schwab that we could deal with that operates like tdAmeritrade.  The distribution of assets or transfer of stocks upon a members departure and the capital gains reponsibilities is a big change for us.  Can anyone explain if this is just a Schwab policy?

On Fri, Sep 29, 2023, 7:34 AM SB via bivio.com <user*1595500001@bivio.com> wrote:
One can see the capital gains apportioned to each partner on the 'Member Tax Allocation Report'. Each partner will realize a gain/loss on assets that are sold in proportion to their interest in the partnership.
Scott


On Fri, Sep 29, 2023 at 7:21 AM Dan Cohn via bivio.com <user*32501700001@bivio.com> wrote:
We use Schwab and realized that when we sell stock in our club to give a withdrawing (deceased) member his percentage in cash; the total membership has to pay the capital gains tax! 

Our club is made up of "ROMEO's" and have been around for awhile so some of the withdrawals are large with good capital gains. So taxes are getting to be significant.

When K1's come out he is paying his capital gains. And so is the rest of the club!?!

What am I missing? Not understanding? Do about it?


ps Schwab does not allow us to transfer stock to a withdrawal member.


thanks
Dan Cohn
NAMC Investment Club #3



--
Donna O'Connell
<Schwab to Fidelity 2023.pdf>
This is all really interesting.

1) I would like to be proven wrong, but I do not believe
Schwab permitted investment club accounts (that were
identified as partnerships or LLCs) prior to the acquisition
of TDA. If they did, it would make no sense that they treat
pre-acquisition clubs differently than post-acquisition
clubs. I do believe that some clubs used accounts under a
member's name, and considered it their club account. If the
name was correct, Bivio would not know the difference, or
perhaps those clubs did their own taxes. I think Schwab was
never set up for organizational accounts and their lawyers
are going bananas trying to figure it all out.
2) Schwab has told our club that a) Schwab will not send
money from the brokerage account to any payee unless that
payee is the club. So to pay a withdrawing partner in cash
or reimburse a club partner for expenses, we have to have a
separate bank account. b) Schwab Bank will not accept
organizational accounts. So we have to open a local account
for those transactions.
3) My understanding of the capital gains taxes on tax stock
transfers to satisfy partnership withdrawals, is that the
partnership gains on the transfer are deferred until the
partnership is liquidated, and the withdrawing partner gets
the stock at the price of the stock at the time of the
transfer, so the withdrawing partner's gains are deferred
until that partner sells the stock. Now if the club sold
the stock to get cash to pay the withdrawing partner,
everyone pays the gains in the year of the sale. It could
not be any other way. Schwab has nothing to do with those
rules; those rules are from the IRS. No broker can affect
how those gains are treated at tax time.

Peter,

I hate to be the prover of wrong, but we had Schwab accounts over 20 years ago and they were listed with the name of the club and the phrase "An Investment Club" in the title of the account. We even had Schwab representatives come out to a club meeting and provide a great presentation of their trading tools. I sure wouldn't want to be an individual member who held the proceeds of the club as their personal account. Our assets were non-trivial.

Withdrawals were always in cash in our club, and the checks were issued to the member. We did provide Schwab with a list of members, most of whom also had their own personal accounts with Schwab.

Because of our advanced age, we decided to liquidate the club account and are now a "virtual" club. We now use the club recommendations for our own portfolios. Prior to Bivio, I had to do the taxes with NAIC purchased programs. Once we discovered Bivio, the task became almost trivial as long as you paid attention to detail and resolved errors monthly.

Dave Vandaveer

FDIC (Friday Depositors Investment Club)

and

Five Star Investors

On 9/30/2023 11:14 AM, Peter Dunkelberger via bivio.com wrote:
This is all really interesting.

1) I would like to be proven wrong, but I do not believe
Schwab permitted investment club accounts (that were
identified as partnerships or LLCs) prior to the acquisition
of TDA.  If they did, it would make no sense that they treat
pre-acquisition clubs differently than post-acquisition
clubs.  I do believe that some clubs used accounts under a
member's name, and considered it their club account.  If the
name was correct, Bivio would not know the difference, or
perhaps those clubs did their own taxes.  I think Schwab was
never set up for organizational accounts and their lawyers
are going bananas trying to figure it all out.
2) Schwab has told our club that a) Schwab will not send
money from the brokerage account  to any payee unless that
payee is the club.  So to pay a withdrawing partner in cash
or reimburse a club partner for expenses, we have to have a
separate bank account. b) Schwab Bank will not accept
organizational accounts.  So we have to open a local account
for those transactions.
3) My understanding of the capital gains taxes on tax stock
transfers to satisfy partnership withdrawals, is that the
partnership gains on the transfer are deferred until the
partnership is liquidated, and the withdrawing partner gets
the stock at the price of the stock at the time of the
transfer, so the withdrawing partner's gains are deferred
until that partner sells the stock.  Now if the club sold
the stock to get cash to pay the withdrawing partner,
everyone pays the gains in the year of the sale.  It could
not be any other way.  Schwab has nothing to do with those
rules; those rules are from the IRS.  No broker can affect
how those gains are treated at tax time.
Hi Peter:

I accept your Challege! Smile

My investment club has had an account at Schwab since 1998
in the name of the investment club partnership name using
the IRS-issued TIN. As treasurer, I have had check-writing
privileges on the brokerage cash account, and have used it
to pay bivio, Better Investment dues, re-imbursed individual
members for club expenses, and paid withdrawing members.

I have no idea what is going on with TDA-transferred
accounts. We have always had a great relationship with our
assigned account representative. If I would have had issues,
I would have discussed it with her.

I agree with your comments in paragraph #3.

Jack
I will be happy to relate my club's experiences when we make the transition - it hasn't happened yet. We have checks from TDAmeritrade and semi-regularly transfer shares to club members in partial or full withdrawals.. We will require both on an ongoing basis and will consider changing brokers if Schwab can't accommodate us. I'm also conversant enough with broker practices to know how to reach the appropriate policy decision maker/gatekeeper to get a definitive answer to these questions. While I could do this now, it makes more sense when there are actual dollars on the line.

ira Smilovitz



On Sat, Sep 30, 2023 at 2:14 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
This is all really interesting.

1) I would like to be proven wrong, but I do not believe
Schwab permitted investment club accounts (that were
identified as partnerships or LLCs) prior to the acquisition
of TDA. If they did, it would make no sense that they treat
pre-acquisition clubs differently than post-acquisition
clubs. I do believe that some clubs used accounts under a
member's name, and considered it their club account. If the
name was correct, Bivio would not know the difference, or
perhaps those clubs did their own taxes. I think Schwab was
never set up for organizational accounts and their lawyers
are going bananas trying to figure it all out.
2) Schwab has told our club that a) Schwab will not send
money from the brokerage account to any payee unless that
payee is the club. So to pay a withdrawing partner in cash
or reimburse a club partner for expenses, we have to have a
separate bank account. b) Schwab Bank will not accept
organizational accounts. So we have to open a local account
for those transactions.
3) My understanding of the capital gains taxes on tax stock
transfers to satisfy partnership withdrawals, is that the
partnership gains on the transfer are deferred until the
partnership is liquidated, and the withdrawing partner gets
the stock at the price of the stock at the time of the
transfer, so the withdrawing partner's gains are deferred
until that partner sells the stock. Now if the club sold
the stock to get cash to pay the withdrawing partner,
everyone pays the gains in the year of the sale. It could
not be any other way. Schwab has nothing to do with those
rules; those rules are from the IRS. No broker can affect
how those gains are treated at tax time.
Ira--I don't understand. How is it your transition has not occurred yet?

Peter Dunkelberger

On Sat, Sep 30, 2023 at 3:30 PM ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
I will be happy to relate my club's experiences when we make the transition - it hasn't happened yet. We have checks from TDAmeritrade and semi-regularly transfer shares to club members in partial or full withdrawals.. We will require both on an ongoing basis and will consider changing brokers if Schwab can't accommodate us. I'm also conversant enough with broker practices to know how to reach the appropriate policy decision maker/gatekeeper to get a definitive answer to these questions. While I could do this now, it makes more sense when there are actual dollars on the line.

ira Smilovitz



On Sat, Sep 30, 2023 at 2:14 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
This is all really interesting.

1) I would like to be proven wrong, but I do not believe
Schwab permitted investment club accounts (that were
identified as partnerships or LLCs) prior to the acquisition
of TDA. If they did, it would make no sense that they treat
pre-acquisition clubs differently than post-acquisition
clubs. I do believe that some clubs used accounts under a
member's name, and considered it their club account. If the
name was correct, Bivio would not know the difference, or
perhaps those clubs did their own taxes. I think Schwab was
never set up for organizational accounts and their lawyers
are going bananas trying to figure it all out.
2) Schwab has told our club that a) Schwab will not send
money from the brokerage account to any payee unless that
payee is the club. So to pay a withdrawing partner in cash
or reimburse a club partner for expenses, we have to have a
separate bank account. b) Schwab Bank will not accept
organizational accounts. So we have to open a local account
for those transactions.
3) My understanding of the capital gains taxes on tax stock
transfers to satisfy partnership withdrawals, is that the
partnership gains on the transfer are deferred until the
partnership is liquidated, and the withdrawing partner gets
the stock at the price of the stock at the time of the
transfer, so the withdrawing partner's gains are deferred
until that partner sells the stock. Now if the club sold
the stock to get cash to pay the withdrawing partner,
everyone pays the gains in the year of the sale. It could
not be any other way. Schwab has nothing to do with those
rules; those rules are from the IRS. No broker can affect
how those gains are treated at tax time.
That is astounding to me. I am going to call Schwab. Since Jack is not a peculiar name, I will tell them my friend Jack said..., and I will ask them why the devil are they treating us differently. It could well be Schwab decided at one point not to accept any more investment clubs. Bizarre.
Thanks for the input.

Peter Dunkelberger

On Sat, Sep 30, 2023 at 2:53 PM John W Ranby Trustee PGM Cariboo Trust via bivio.com <user*15792700001@bivio.com> wrote:
Hi Peter:

I accept your Challege! Smile

My investment club has had an account at Schwab since 1998
in the name of the investment club partnership name using
the IRS-issued TIN. As treasurer, I have had check-writing
privileges on the brokerage cash account, and have used it
to pay bivio, Better Investment dues, re-imbursed individual
members for club expenses, and paid withdrawing members.

I have no idea what is going on with TDA-transferred
accounts. We have always had a great relationship with our
assigned account representative. If I would have had issues,
I would have discussed it with her.

I agree with your comments in paragraph #3.

Jack
You are not the first person to tell me this. So Schwab must have decided at one point to no longer accept investment clubs, because they certainly are treating us differently.

Peter Dunkelberger

On Sat, Sep 30, 2023 at 2:43 PM Dave Vandaveer via bivio.com <user*15796400001@bivio.com> wrote:

Peter,

I hate to be the prover of wrong, but we had Schwab accounts over 20 years ago and they were listed with the name of the club and the phrase "An Investment Club" in the title of the account. We even had Schwab representatives come out to a club meeting and provide a great presentation of their trading tools. I sure wouldn't want to be an individual member who held the proceeds of the club as their personal account. Our assets were non-trivial.

Withdrawals were always in cash in our club, and the checks were issued to the member. We did provide Schwab with a list of members, most of whom also had their own personal accounts with Schwab.

Because of our advanced age, we decided to liquidate the club account and are now a "virtual" club. We now use the club recommendations for our own portfolios. Prior to Bivio, I had to do the taxes with NAIC purchased programs. Once we discovered Bivio, the task became almost trivial as long as you paid attention to detail and resolved errors monthly.

Dave Vandaveer

FDIC (Friday Depositors Investment Club)

and

Five Star Investors

On 9/30/2023 11:14 AM, Peter Dunkelberger via bivio.com wrote:
This is all really interesting.

1) I would like to be proven wrong, but I do not believe
Schwab permitted investment club accounts (that were
identified as partnerships or LLCs) prior to the acquisition
of TDA.  If they did, it would make no sense that they treat
pre-acquisition clubs differently than post-acquisition
clubs.  I do believe that some clubs used accounts under a
member's name, and considered it their club account.  If the
name was correct, Bivio would not know the difference, or
perhaps those clubs did their own taxes.  I think Schwab was
never set up for organizational accounts and their lawyers
are going bananas trying to figure it all out.
2) Schwab has told our club that a) Schwab will not send
money from the brokerage account  to any payee unless that
payee is the club.  So to pay a withdrawing partner in cash
or reimburse a club partner for expenses, we have to have a
separate bank account. b) Schwab Bank will not accept
organizational accounts.  So we have to open a local account
for those transactions.
3) My understanding of the capital gains taxes on tax stock
transfers to satisfy partnership withdrawals, is that the
partnership gains on the transfer are deferred until the
partnership is liquidated, and the withdrawing partner gets
the stock at the price of the stock at the time of the
transfer, so the withdrawing partner's gains are deferred
until that partner sells the stock.  Now if the club sold
the stock to get cash to pay the withdrawing partner,
everyone pays the gains in the year of the sale.  It could
not be any other way.  Schwab has nothing to do with those
rules; those rules are from the IRS.  No broker can affect
how those gains are treated at tax time.
Is your club a partnership with a TIN? I don't understand why Schwab would care what "business" the partnership is in or what their name is. Maybe I'm naive.

c.e

On Sat, Sep 30, 2023, 3:44 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
You are not the first person to tell me this. So Schwab must have decided at one point to no longer accept investment clubs, because they certainly are treating us differently.

Peter Dunkelberger

On Sat, Sep 30, 2023 at 2:43 PM Dave Vandaveer via bivio.com <user*15796400001@bivio.com> wrote:

Peter,

I hate to be the prover of wrong, but we had Schwab accounts over 20 years ago and they were listed with the name of the club and the phrase "An Investment Club" in the title of the account. We even had Schwab representatives come out to a club meeting and provide a great presentation of their trading tools. I sure wouldn't want to be an individual member who held the proceeds of the club as their personal account. Our assets were non-trivial.

Withdrawals were always in cash in our club, and the checks were issued to the member. We did provide Schwab with a list of members, most of whom also had their own personal accounts with Schwab.

Because of our advanced age, we decided to liquidate the club account and are now a "virtual" club. We now use the club recommendations for our own portfolios. Prior to Bivio, I had to do the taxes with NAIC purchased programs. Once we discovered Bivio, the task became almost trivial as long as you paid attention to detail and resolved errors monthly.

Dave Vandaveer

FDIC (Friday Depositors Investment Club)

and

Five Star Investors

On 9/30/2023 11:14 AM, Peter Dunkelberger via bivio.com wrote:
This is all really interesting.

1) I would like to be proven wrong, but I do not believe
Schwab permitted investment club accounts (that were
identified as partnerships or LLCs) prior to the acquisition
of TDA.  If they did, it would make no sense that they treat
pre-acquisition clubs differently than post-acquisition
clubs.  I do believe that some clubs used accounts under a
member's name, and considered it their club account.  If the
name was correct, Bivio would not know the difference, or
perhaps those clubs did their own taxes.  I think Schwab was
never set up for organizational accounts and their lawyers
are going bananas trying to figure it all out.
2) Schwab has told our club that a) Schwab will not send
money from the brokerage account  to any payee unless that
payee is the club.  So to pay a withdrawing partner in cash
or reimburse a club partner for expenses, we have to have a
separate bank account. b) Schwab Bank will not accept
organizational accounts.  So we have to open a local account
for those transactions.
3) My understanding of the capital gains taxes on tax stock
transfers to satisfy partnership withdrawals, is that the
partnership gains on the transfer are deferred until the
partnership is liquidated, and the withdrawing partner gets
the stock at the price of the stock at the time of the
transfer, so the withdrawing partner's gains are deferred
until that partner sells the stock.  Now if the club sold
the stock to get cash to pay the withdrawing partner,
everyone pays the gains in the year of the sale.  It could
not be any other way.  Schwab has nothing to do with those
rules; those rules are from the IRS.  No broker can affect
how those gains are treated at tax time.
I don't know. Each time TDAmertrade announces a tranche of conversions, I expect to be included. The latest public announcement is that they expect to complete the transitions in early 2024. Perhaps it's because we were a conversion from Amertrade when TD Bank bought them.

Ira Smilovitz

On Sat, Sep 30, 2023 at 4:35 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Ira--I don't understand. How is it your transition has not occurred yet?

Peter Dunkelberger

On Sat, Sep 30, 2023 at 3:30 PM ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
I will be happy to relate my club's experiences when we make the transition - it hasn't happened yet. We have checks from TDAmeritrade and semi-regularly transfer shares to club members in partial or full withdrawals.. We will require both on an ongoing basis and will consider changing brokers if Schwab can't accommodate us. I'm also conversant enough with broker practices to know how to reach the appropriate policy decision maker/gatekeeper to get a definitive answer to these questions. While I could do this now, it makes more sense when there are actual dollars on the line.

ira Smilovitz



On Sat, Sep 30, 2023 at 2:14 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
This is all really interesting.

1) I would like to be proven wrong, but I do not believe
Schwab permitted investment club accounts (that were
identified as partnerships or LLCs) prior to the acquisition
of TDA. If they did, it would make no sense that they treat
pre-acquisition clubs differently than post-acquisition
clubs. I do believe that some clubs used accounts under a
member's name, and considered it their club account. If the
name was correct, Bivio would not know the difference, or
perhaps those clubs did their own taxes. I think Schwab was
never set up for organizational accounts and their lawyers
are going bananas trying to figure it all out.
2) Schwab has told our club that a) Schwab will not send
money from the brokerage account to any payee unless that
payee is the club. So to pay a withdrawing partner in cash
or reimburse a club partner for expenses, we have to have a
separate bank account. b) Schwab Bank will not accept
organizational accounts. So we have to open a local account
for those transactions.
3) My understanding of the capital gains taxes on tax stock
transfers to satisfy partnership withdrawals, is that the
partnership gains on the transfer are deferred until the
partnership is liquidated, and the withdrawing partner gets
the stock at the price of the stock at the time of the
transfer, so the withdrawing partner's gains are deferred
until that partner sells the stock. Now if the club sold
the stock to get cash to pay the withdrawing partner,
everyone pays the gains in the year of the sale. It could
not be any other way. Schwab has nothing to do with those
rules; those rules are from the IRS. No broker can affect
how those gains are treated at tax time.
Our club was switched over Labor Day weekend. We did have check writing privileges with TDA and days before the transfer we received checks from Schwab with our new account and wrote a check to a partial withdrawing partner and had no problems. If you have not switched yet and don't have checks for TDA then apply for them. I believe in another thread that someone said that since they did not have checks with TDA then Schwab wouldn't give them checks. Also, after the transfer complain when they send you the survey. I had someone call me within days from filling out the survey to talk to me about it. I tried calling back but didn't get through so I'll try again. I will let them know that I have heard from Bivio members that some clubs are pulling out of Schwab because of this.

John

On Sat, Sep 30, 2023 at 3:40 PM ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
I don't know. Each time TDAmertrade announces a tranche of conversions, I expect to be included. The latest public announcement is that they expect to complete the transitions in early 2024. Perhaps it's because we were a conversion from Amertrade when TD Bank bought them.

Ira Smilovitz

On Sat, Sep 30, 2023 at 4:35 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Ira--I don't understand. How is it your transition has not occurred yet?

Peter Dunkelberger

On Sat, Sep 30, 2023 at 3:30 PM ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
I will be happy to relate my club's experiences when we make the transition - it hasn't happened yet. We have checks from TDAmeritrade and semi-regularly transfer shares to club members in partial or full withdrawals.. We will require both on an ongoing basis and will consider changing brokers if Schwab can't accommodate us. I'm also conversant enough with broker practices to know how to reach the appropriate policy decision maker/gatekeeper to get a definitive answer to these questions. While I could do this now, it makes more sense when there are actual dollars on the line.

ira Smilovitz



On Sat, Sep 30, 2023 at 2:14 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
This is all really interesting.

1) I would like to be proven wrong, but I do not believe
Schwab permitted investment club accounts (that were
identified as partnerships or LLCs) prior to the acquisition
of TDA. If they did, it would make no sense that they treat
pre-acquisition clubs differently than post-acquisition
clubs. I do believe that some clubs used accounts under a
member's name, and considered it their club account. If the
name was correct, Bivio would not know the difference, or
perhaps those clubs did their own taxes. I think Schwab was
never set up for organizational accounts and their lawyers
are going bananas trying to figure it all out.
2) Schwab has told our club that a) Schwab will not send
money from the brokerage account to any payee unless that
payee is the club. So to pay a withdrawing partner in cash
or reimburse a club partner for expenses, we have to have a
separate bank account. b) Schwab Bank will not accept
organizational accounts. So we have to open a local account
for those transactions.
3) My understanding of the capital gains taxes on tax stock
transfers to satisfy partnership withdrawals, is that the
partnership gains on the transfer are deferred until the
partnership is liquidated, and the withdrawing partner gets
the stock at the price of the stock at the time of the
transfer, so the withdrawing partner's gains are deferred
until that partner sells the stock. Now if the club sold
the stock to get cash to pay the withdrawing partner,
everyone pays the gains in the year of the sale. It could
not be any other way. Schwab has nothing to do with those
rules; those rules are from the IRS. No broker can affect
how those gains are treated at tax time.