Our agreement said that the decision was up to the club. Do what is best for the club. In all our time,whenever we have transferred stock, it has never resulted in a loss for the member but has resulted in a gain. It's beneficial to use this opportunity to sell losers, that you want to get out of your portfolio.then you can give both cash and stock. Be sure that you understand how the Bivio bookkeeping works on a buyout or partial withdrawal. Everything is put in and dated for the date your PA designates.
On Sun, Jun 8, 2025 at 7:53 PM, Kathy McGovern via bivio.com
<user*18459000001@bivio.com> wrote:
My club's bylaws allow the club members to decide whether to pay a member in cash or stocks. You could transfer stocks and the member would be able to immediately liquidate the stock. This would be more advantageous for the club to keep from paying capital gains. If paying in cash, the club would need to report two separate transactions to Bivio: first, the sale of stock and then the transfer of funds.
Kathy McGovern
On Jun 8, 2025, at 6:01â¯PM, Richard Evans via bivio.com <user*32774200001@bivio.com> wrote:
To add on to my question How does the treasurer report to Bivio about the transaction? The selling of stock and money going to one member?
Diana
Sent from my iPhone
On Jun 8, 2025, at 6:52â¯PM, Richard Evans via bivio.com <user*32774200001@bivio.com> wrote:

I need basics. A member is requesting a substantial amount of her money. Not in stocks but in cash. We will have to decide which stock or stocks to sell to come up with $20,000. We have made great decisions on stocks, everything but one is a gain in dollar value as well as dividends. Which means capital gains. Is each member be required to pay capital gains on their taxes or is it just the member who is requesting the payment?
Diana Evans
Sent from my iPhone
On Jun 6, 2025, at 12:38â¯PM, Anne Weeks via bivio.com <user*6029900001@bivio.com> wrote:
On Thursday, June 5, 2025, 4:30 PM, John Rice via bivio.com <user*24380400001@bivio.com> wrote:
Schwab doesn't allow shares to be distributed to members. The only alternative for transferring stock to members and avoiding the IRMAA adjustment will be to switch your broker to another one that allows stock transfers to members. After the transfer to the new broker you can disband and distribute the stocks and cash. The individual members now have the choice to sell the amount of stocks each year to avoid the IRMAA and higher tax on capital gains.
Could you please provide the Schwab form number. You are the first investment club that has been able to perform a stock transfer to a member that has reported through club cafe. We have been told that Schwab will not transfer stock from an investment Club to a member.
Our club, The Bear Trap Co., switched to Schwab when TD Ameritrade ended a few years ago. We have given stock transfers to a member twice in the past year. Before that our experience was to sell stock(s) to give to a member withdrawing a portion of their
club shares or a complete withdrawal. No issues with Schwab. We do have to fill out a form and the two co-signers in our club (Treasurer and Assistant Treasurer) have to sign. We are lucky to have a Schwab office nearby where we drop off the form.
Like many clubs, we are planning to closedown this year.
Just members getting older. We are with Schwab with
checking privileges. Obviously, it is simpler to sell
everything and distribute the cash. But some members have
large capital gains and would prefer stock. I have been the
long time treasurer and have been reading the conversations
on here for ideas.
I have some specific questions.
Must all distributions be the same for each member, that is
all cash or all stock?
Is Schwab allowing stock transfers? Hard or easy to work
with them?
Has anyone considered the effect of these large capital
gains on the IRMAA adjustment (Medicare)? Any work around
ideas.
If our club distributes shares, I am considering using a CPA
to do things properly. Or is that overkill and I should be
able to do myself?
What about taking some capital gains this year and doing the
final shutdown next year? Any advantages?
Thanks for your thoughts. I am sure I will be posting again
soon.
Anne Weeks
Suzanne Montgomery on
Does that mean that the member requesting the money has to pay 100% of the capital gains? Does that seem fair to everyone?
On Jun 8, 2025, at 8:16â¯PM, Tracy, Molly M via bivio.com <user*40992200001@bivio.com> wrote:

If you sell appreciated stocks, all club members will be subject to capital gain taxes.
To avoid this, You should sell your losing stock, or consider transferring appreciated stock to the member requesting the money. He/she can liquidate the stock for cash if they desire and the rest of the members won't be penalized.
Molly
P.s. our bylaws gives our club the option of transferring stock whenever a member requests a partial or full withdrawal.
Sent from my iPhone
On Jun 8, 2025, at 5:52â¯PM, Richard Evans via bivio.com <user*32774200001@bivio.com> wrote:
 I need basics. A member is requesting a substantial amount of her money. Not in stocks but in cash. We will have to decide which stock or stocks to sell to come up with $20,000. We have made great decisions on stocks, everything but one is
a gain in dollar value as well as dividends. Which means capital gains. Is each member be required to pay capital gains on their taxes or is it just the member who is requesting the payment?
Diana Evans
Sent from my iPhone
On Jun 6, 2025, at 12:38â¯PM, Anne Weeks via bivio.com <user*6029900001@bivio.com> wrote:
On Thursday, June 5, 2025, 4:30 PM, John Rice via bivio.com <user*24380400001@bivio.com> wrote:
Schwab doesn't allow shares to be distributed to members. The only alternative for transferring stock to members and avoiding the IRMAA adjustment will be to switch your broker to another one that allows stock transfers to members. After the
transfer to the new broker you can disband and distribute the stocks and cash. The individual members now have the choice to sell the amount of stocks each year to avoid the IRMAA and higher tax on capital gains.
Could you please provide the Schwab form number. You are the first investment club that has been able to perform a stock transfer to a member that has reported through club cafe. We have been told that Schwab will not transfer stock from an investment
Club to a member.
Our club, The Bear Trap Co., switched to Schwab when TD Ameritrade ended a few years ago. We have given stock transfers to a member twice in the past year. Before that our experience was to sell stock(s) to give to a member withdrawing a portion of their
club shares or a complete withdrawal. No issues with Schwab. We do have to fill out a form and the two co-signers in our club (Treasurer and Assistant Treasurer) have to sign. We are lucky to have a Schwab office nearby where we drop off the form.
Like many clubs, we are planning to closedown this year.
Just members getting older. We are with Schwab with
checking privileges. Obviously, it is simpler to sell
everything and distribute the cash. But some members have
large capital gains and would prefer stock. I have been the
long time treasurer and have been reading the conversations
on here for ideas.
I have some specific questions.
Must all distributions be the same for each member, that is
all cash or all stock?
Is Schwab allowing stock transfers? Hard or easy to work
with them?
Has anyone considered the effect of these large capital
gains on the IRMAA adjustment (Medicare)? Any work around
ideas.
If our club distributes shares, I am considering using a CPA
to do things properly. Or is that overkill and I should be
able to do myself?
What about taking some capital gains this year and doing the
final shutdown next year? Any advantages?
Thanks for your thoughts. I am sure I will be posting again
soon.
Anne Weeks
Dick/Diana Evans on
I think I had the incorrect heading. We are not closing, just doing a payout.
Diana
On Sunday, June 8, 2025 at 07:02:12 PM EDT, Richard Evans via bivio.com <user*32774200001@bivio.com> wrote:
To add on to my question How does the treasurer report to Bivio about the transaction? The selling of stock and money going to one member?
Diana
Sent from my iPhone
On Jun 8, 2025, at 6:52 PM, Richard Evans via bivio.com <user*32774200001@bivio.com> wrote:
I need basics. A member is requesting a substantial amount of her money. Not in stocks but in cash. We will have to decide which stock or stocks to sell to come up with $20,000. We have made great decisions on stocks, everything but one is a gain in dollar value as well as dividends. Which means capital gains. Is each member be required to pay capital gains on their taxes or is it just the member who is requesting the payment?
Diana Evans
Sent from my iPhone
On Jun 6, 2025, at 12:38 PM, Anne Weeks via bivio.com <user*6029900001@bivio.com> wrote:
On Thursday, June 5, 2025, 4:30 PM, John Rice via bivio.com <user*24380400001@bivio.com> wrote:
Schwab doesn't allow shares to be distributed to members. The only alternative for transferring stock to members and avoiding the IRMAA adjustment will be to switch your broker to another one that allows stock transfers to members. After the transfer to the new broker you can disband and distribute the stocks and cash. The individual members now have the choice to sell the amount of stocks each year to avoid the IRMAA and higher tax on capital gains.
Could you please provide the Schwab form number. You are the first investment club that has been able to perform a stock transfer to a member that has reported through club cafe. We have been told that Schwab will not transfer stock from an investment Club to a member.
Our club, The Bear Trap Co., switched to Schwab when TD Ameritrade ended a few years ago. We have given stock transfers to a member twice in the past year. Before that our experience was to sell stock(s) to give to a member withdrawing a portion of their
club shares or a complete withdrawal. No issues with Schwab. We do have to fill out a form and the two co-signers in our club (Treasurer and Assistant Treasurer) have to sign. We are lucky to have a Schwab office nearby where we drop off the form.
Like many clubs, we are planning to closedown this year.
Just members getting older. We are with Schwab with
checking privileges. Obviously, it is simpler to sell
everything and distribute the cash. But some members have
large capital gains and would prefer stock. I have been the
long time treasurer and have been reading the conversations
on here for ideas.
I have some specific questions.
Must all distributions be the same for each member, that is
all cash or all stock?
Is Schwab allowing stock transfers? Hard or easy to work
with them?
Has anyone considered the effect of these large capital
gains on the IRMAA adjustment (Medicare)? Any work around
ideas.
If our club distributes shares, I am considering using a CPA
to do things properly. Or is that overkill and I should be
able to do myself?
What about taking some capital gains this year and doing the
final shutdown next year? Any advantages?
Thanks for your thoughts. I am sure I will be posting again
soon.
Anne Weeks
Carole Jansen on
No, the gains are taxed to the members/partners in accordance with their percentage of ownership in the club/partnership, including the member getting the cash withdrawal. Cash withdrawals are super unfair to the members who don't want any more income (capital gains) that may impact their tax bracket and/or IRMAA. That is why it is the partners that (usually) get to determine how a member gets his or her withdrawal, so that one member can't affect the tax plans of the others.

If you sell appreciated stocks, all club members will be subject to capital gain taxes.
To avoid this, You should sell your losing stock, or consider transferring appreciated stock to the member requesting the money. He/she can liquidate the stock for cash if they desire and the rest of the members won't be penalized.
Molly
P.s. our bylaws gives our club the option of transferring stock whenever a member requests a partial or full withdrawal.
 I need basics. A member is requesting a substantial amount of her money. Not in stocks but in cash. We will have to decide which stock or stocks to sell to come up with $20,000. We have made great decisions on stocks, everything but one is
a gain in dollar value as well as dividends. Which means capital gains. Is each member be required to pay capital gains on their taxes or is it just the member who is requesting the payment?
Schwab doesn't allow shares to be distributed to members. The only alternative for transferring stock to members and avoiding the IRMAA adjustment will be to switch your broker to another one that allows stock transfers to members. After the
transfer to the new broker you can disband and distribute the stocks and cash. The individual members now have the choice to sell the amount of stocks each year to avoid the IRMAA and higher tax on capital gains.
Could you please provide the Schwab form number. You are the first investment club that has been able to perform a stock transfer to a member that has reported through club cafe. We have been told that Schwab will not transfer stock from an investment
Club to a member.
Our club, The Bear Trap Co., switched to Schwab when TD Ameritrade ended a few years ago. We have given stock transfers to a member twice in the past year. Before that our experience was to sell stock(s) to give to a member withdrawing a portion of their
club shares or a complete withdrawal. No issues with Schwab. We do have to fill out a form and the two co-signers in our club (Treasurer and Assistant Treasurer) have to sign. We are lucky to have a Schwab office nearby where we drop off the form.
Like many clubs, we are planning to closedown this year.
Just members getting older. We are with Schwab with
checking privileges. Obviously, it is simpler to sell
everything and distribute the cash. But some members have
large capital gains and would prefer stock. I have been the
long time treasurer and have been reading the conversations
on here for ideas.
I have some specific questions.
Must all distributions be the same for each member, that is
all cash or all stock?
Is Schwab allowing stock transfers? Hard or easy to work
with them?
Has anyone considered the effect of these large capital
gains on the IRMAA adjustment (Medicare)? Any work around
ideas.
If our club distributes shares, I am considering using a CPA
to do things properly. Or is that overkill and I should be
able to do myself?
What about taking some capital gains this year and doing the
final shutdown next year? Any advantages?
Thanks for your thoughts. I am sure I will be posting again
soon.
Anne Weeks
mp on
Remaining member(s) can agree with departing member to buy out the departing member's share with OUTSIDE funds. There is no sale of club assets. No tax impact to club or remaining club members. All tax impact is on departing member who is expecting it anyway. Basis of remaining member(s) changes. Consult a tax professional.
No, the gains are taxed to the members/partners in accordance with their percentage of ownership in the club/partnership, including the member getting the cash withdrawal. Cash withdrawals are super unfair to the members who don't want any more income (capital gains) that may impact their tax bracket and/or IRMAA. That is why it is the partners that (usually) get to determine how a member gets his or her withdrawal, so that one member can't affect the tax plans of the others.

If you sell appreciated stocks, all club members will be subject to capital gain taxes.
To avoid this, You should sell your losing stock, or consider transferring appreciated stock to the member requesting the money. He/she can liquidate the stock for cash if they desire and the rest of the members won't be penalized.
Molly
P.s. our bylaws gives our club the option of transferring stock whenever a member requests a partial or full withdrawal.
 I need basics. A member is requesting a substantial amount of her money. Not in stocks but in cash. We will have to decide which stock or stocks to sell to come up with $20,000. We have made great decisions on stocks, everything but one is
a gain in dollar value as well as dividends. Which means capital gains. Is each member be required to pay capital gains on their taxes or is it just the member who is requesting the payment?
Schwab doesn't allow shares to be distributed to members. The only alternative for transferring stock to members and avoiding the IRMAA adjustment will be to switch your broker to another one that allows stock transfers to members. After the
transfer to the new broker you can disband and distribute the stocks and cash. The individual members now have the choice to sell the amount of stocks each year to avoid the IRMAA and higher tax on capital gains.
Could you please provide the Schwab form number. You are the first investment club that has been able to perform a stock transfer to a member that has reported through club cafe. We have been told that Schwab will not transfer stock from an investment
Club to a member.
Our club, The Bear Trap Co., switched to Schwab when TD Ameritrade ended a few years ago. We have given stock transfers to a member twice in the past year. Before that our experience was to sell stock(s) to give to a member withdrawing a portion of their
club shares or a complete withdrawal. No issues with Schwab. We do have to fill out a form and the two co-signers in our club (Treasurer and Assistant Treasurer) have to sign. We are lucky to have a Schwab office nearby where we drop off the form.
Like many clubs, we are planning to closedown this year.
Just members getting older. We are with Schwab with
checking privileges. Obviously, it is simpler to sell
everything and distribute the cash. But some members have
large capital gains and would prefer stock. I have been the
long time treasurer and have been reading the conversations
on here for ideas.
I have some specific questions.
Must all distributions be the same for each member, that is
all cash or all stock?
Is Schwab allowing stock transfers? Hard or easy to work
with them?
Has anyone considered the effect of these large capital
gains on the IRMAA adjustment (Medicare)? Any work around
ideas.
If our club distributes shares, I am considering using a CPA
to do things properly. Or is that overkill and I should be
able to do myself?
What about taking some capital gains this year and doing the
final shutdown next year? Any advantages?
Thanks for your thoughts. I am sure I will be posting again
soon.
Anne Weeks
ira smilovitz on
If you sell any stock before the withdrawal date, every member of the club will report their proportional share of the gains on their 2025 personal tax return.
If you give stock, and this is not a full withdrawal, the member receiving the stock will assume the club's cost basis in the shares. This could create more or less capital gain when the shares are sold than a full withdrawal on the same date. The "good" news, if there is any, is that their final capital gain (or loss) on their final withdrawal will be adjusted to account for any accelerated gain from the partial withdrawal.
If you give stock and this is a full withdrawal, the withdrawing member assumes an adjusted cost basis in the shares received which is equal to their tax basis in the club. For the remaining members, their proportional share of the capital gains (had that stock been sold) is locked away and won't be reported until each member makes a full withdrawal from the club.
The foregoing is somewhat simplified as it ignores the treatment of any cash received in the withdrawal.
I need basics. A member is requesting a substantial amount of her money. Not in stocks but in cash. We will have to decide which stock or stocks to sell to come up with $20,000. We have made great decisions on stocks, everything but one is a gain in dollar value as well as dividends. Which means capital gains. Is each member be required to pay capital gains on their taxes or is it just the member who is requesting the payment?
Schwab doesn't allow shares to be distributed to members. The only alternative for transferring stock to members and avoiding the IRMAA adjustment will be to switch your broker to another one that allows stock transfers to members. After the transfer to the new broker you can disband and distribute the stocks and cash. The individual members now have the choice to sell the amount of stocks each year to avoid the IRMAA and higher tax on capital gains.
Could you please provide the Schwab form number. You are the first investment club that has been able to perform a stock transfer to a member that has reported through club cafe. We have been told that Schwab will not transfer stock from an investment Club to a member.
Our club, The Bear Trap Co., switched to Schwab when TD Ameritrade ended a few years ago. We have given stock transfers to a member twice in the past year. Before that our experience was to sell stock(s) to give to a member withdrawing a portion of their
club shares or a complete withdrawal. No issues with Schwab. We do have to fill out a form and the two co-signers in our club (Treasurer and Assistant Treasurer) have to sign. We are lucky to have a Schwab office nearby where we drop off the form.
Like many clubs, we are planning to closedown this year.
Just members getting older. We are with Schwab with
checking privileges. Obviously, it is simpler to sell
everything and distribute the cash. But some members have
large capital gains and would prefer stock. I have been the
long time treasurer and have been reading the conversations
on here for ideas.
I have some specific questions.
Must all distributions be the same for each member, that is
all cash or all stock?
Is Schwab allowing stock transfers? Hard or easy to work
with them?
Has anyone considered the effect of these large capital
gains on the IRMAA adjustment (Medicare)? Any work around
ideas.
If our club distributes shares, I am considering using a CPA
to do things properly. Or is that overkill and I should be
able to do myself?
What about taking some capital gains this year and doing the
final shutdown next year? Any advantages?
Thanks for your thoughts. I am sure I will be posting again
soon.
Anne Weeks
Robert Shaw on
Each member has an individual share (basis) of the capital gains.
The rules regarding basis are different for partial withdrawals.
Make sure you understand this difference.
Here are two articles that discuss this situation.
One from iClub and one from bivio.
Whatever you do NOT do anything until the withdrawal paperwork is complete and correct.
On Jun 8, 2025, at 8:34â¯PM, Suzanne Montgomery via bivio.com <user*28484400001@bivio.com> wrote:
Does that mean that the member requesting the money has to pay 100% of the capital gains? Does that seem fair to everyone?
On Jun 8, 2025, at 8:16â¯PM, Tracy, Molly M via bivio.com <user*40992200001@bivio.com> wrote:

If you sell appreciated stocks, all club members will be subject to capital gain taxes.
To avoid this, You should sell your losing stock, or consider transferring appreciated stock to the member requesting the money. He/she can liquidate the stock for cash if they desire and the rest of the members won't be penalized.
Molly
P.s. our bylaws gives our club the option of transferring stock whenever a member requests a partial or full withdrawal.
Sent from my iPhone
On Jun 8, 2025, at 5:52â¯PM, Richard Evans via bivio.com <user*32774200001@bivio.com> wrote:
 I need basics. A member is requesting a substantial amount of her money. Not in stocks but in cash. We will have to decide which stock or stocks to sell to come up with $20,000. We have made great decisions on stocks, everything but one is
a gain in dollar value as well as dividends. Which means capital gains. Is each member be required to pay capital gains on their taxes or is it just the member who is requesting the payment?
Diana Evans
Sent from my iPhone
On Jun 6, 2025, at 12:38â¯PM, Anne Weeks via bivio.com <user*6029900001@bivio.com> wrote:
On Thursday, June 5, 2025, 4:30 PM, John Rice via bivio.com <user*24380400001@bivio.com> wrote:
Schwab doesn't allow shares to be distributed to members. The only alternative for transferring stock to members and avoiding the IRMAA adjustment will be to switch your broker to another one that allows stock transfers to members. After the
transfer to the new broker you can disband and distribute the stocks and cash. The individual members now have the choice to sell the amount of stocks each year to avoid the IRMAA and higher tax on capital gains.
Could you please provide the Schwab form number. You are the first investment club that has been able to perform a stock transfer to a member that has reported through club cafe. We have been told that Schwab will not transfer stock from an investment
Club to a member.
Our club, The Bear Trap Co., switched to Schwab when TD Ameritrade ended a few years ago. We have given stock transfers to a member twice in the past year. Before that our experience was to sell stock(s) to give to a member withdrawing a portion of their
club shares or a complete withdrawal. No issues with Schwab. We do have to fill out a form and the two co-signers in our club (Treasurer and Assistant Treasurer) have to sign. We are lucky to have a Schwab office nearby where we drop off the form.
Like many clubs, we are planning to closedown this year.
Just members getting older. We are with Schwab with
checking privileges. Obviously, it is simpler to sell
everything and distribute the cash. But some members have
large capital gains and would prefer stock. I have been the
long time treasurer and have been reading the conversations
on here for ideas.
I have some specific questions.
Must all distributions be the same for each member, that is
all cash or all stock?
Is Schwab allowing stock transfers? Hard or easy to work
with them?
Has anyone considered the effect of these large capital
gains on the IRMAA adjustment (Medicare)? Any work around
ideas.
If our club distributes shares, I am considering using a CPA
to do things properly. Or is that overkill and I should be
able to do myself?
What about taking some capital gains this year and doing the
final shutdown next year? Any advantages?
Thanks for your thoughts. I am sure I will be posting again
soon.
Anne Weeks
Tracy, Molly M on
Well said. Thank you for this concise explanation.
Sent from my iPhone
On Jun 9, 2025, at 12:17 AM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
If you sell any stock before the withdrawal date, every member of the club will report their proportional share of the gains on their 2025 personal tax return.
If you give stock, and this is not a full withdrawal, the member receiving the stock will assume the club's cost basis in the shares. This could create more or less capital gain when the shares are sold than
a full withdrawal on the same date. The "good" news, if there is any, is that their final capital gain (or loss) on their final withdrawal will be adjusted to account for any accelerated gain from the partial withdrawal.
If you give stock and this is a full withdrawal, the withdrawing member assumes an adjusted cost basis in the shares received which is equal to their tax basis in the club. For the remaining members, their
proportional share of the capital gains (had that stock been sold) is locked away and won't be reported until each member makes a full withdrawal from the club.
The foregoing is somewhat simplified as it ignores the treatment of any cash received in the withdrawal.
I need basics. A member is requesting a substantial amount of her money. Not in stocks but in cash. We will have to decide which stock or stocks to sell to come up with $20,000. We have made great decisions on stocks, everything but one is a
gain in dollar value as well as dividends. Which means capital gains. Is each member be required to pay capital gains on their taxes or is it just the member who is requesting the payment?
Schwab doesn't allow shares to be distributed to members. The only alternative for transferring stock to members and avoiding the IRMAA adjustment will be to switch your broker to another one that allows stock transfers to members. After the
transfer to the new broker you can disband and distribute the stocks and cash. The individual members now have the choice to sell the amount of stocks each year to avoid the IRMAA and higher tax on capital gains.
Could you please provide the Schwab form number. You are the first investment club that has been able to perform a stock transfer to a member that has reported through club cafe. We have been told that Schwab will not transfer stock from an investment
Club to a member.
Our club, The Bear Trap Co., switched to Schwab when TD Ameritrade ended a few years ago. We have given stock transfers to a member twice in the past year. Before that our experience was to sell stock(s) to give to a member withdrawing a portion of their
club shares or a complete withdrawal. No issues with Schwab. We do have to fill out a form and the two co-signers in our club (Treasurer and Assistant Treasurer) have to sign. We are lucky to have a Schwab office nearby where we drop off the form.
Like many clubs, we are planning to closedown this year.
Just members getting older. We are with Schwab with
checking privileges. Obviously, it is simpler to sell
everything and distribute the cash. But some members have
large capital gains and would prefer stock. I have been the
long time treasurer and have been reading the conversations
on here for ideas.
I have some specific questions.
Must all distributions be the same for each member, that is
all cash or all stock?
Is Schwab allowing stock transfers? Hard or easy to work
with them?
Has anyone considered the effect of these large capital
gains on the IRMAA adjustment (Medicare)? Any work around
ideas.
If our club distributes shares, I am considering using a CPA
to do things properly. Or is that overkill and I should be
able to do myself?
What about taking some capital gains this year and doing the
final shutdown next year? Any advantages?
Thanks for your thoughts. I am sure I will be posting again
soon.
Anne Weeks
Suzanne Montgomery on
yes, wonderful explanation!
thank you.
On Jun 9, 2025, at 8:49 AM, Tracy, Molly M via bivio.com <user*40992200001@bivio.com> wrote:
Well said. Thank you for this concise explanation.
Sent from my iPhone
On Jun 9, 2025, at 12:17 AM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
If you sell any stock before the withdrawal date, every member of the club will report their proportional share of the gains on their 2025 personal tax return.
If you give stock, and this is not a full withdrawal, the member receiving the stock will assume the club's cost basis in the shares. This could create more or less capital gain when the shares are sold than
a full withdrawal on the same date. The "good" news, if there is any, is that their final capital gain (or loss) on their final withdrawal will be adjusted to account for any accelerated gain from the partial withdrawal.
If you give stock and this is a full withdrawal, the withdrawing member assumes an adjusted cost basis in the shares received which is equal to their tax basis in the club. For the remaining members, their
proportional share of the capital gains (had that stock been sold) is locked away and won't be reported until each member makes a full withdrawal from the club.
The foregoing is somewhat simplified as it ignores the treatment of any cash received in the withdrawal.
I need basics. A member is requesting a substantial amount of her money. Not in stocks but in cash. We will have to decide which stock or stocks to sell to come up with $20,000. We have made great decisions on stocks, everything but one is a
gain in dollar value as well as dividends. Which means capital gains. Is each member be required to pay capital gains on their taxes or is it just the member who is requesting the payment?
Schwab doesn't allow shares to be distributed to members. The only alternative for transferring stock to members and avoiding the IRMAA adjustment will be to switch your broker to another one that allows stock transfers to members. After the
transfer to the new broker you can disband and distribute the stocks and cash. The individual members now have the choice to sell the amount of stocks each year to avoid the IRMAA and higher tax on capital gains.
Could you please provide the Schwab form number. You are the first investment club that has been able to perform a stock transfer to a member that has reported through club cafe. We have been told that Schwab will not transfer stock from an investment
Club to a member.
Our club, The Bear Trap Co., switched to Schwab when TD Ameritrade ended a few years ago. We have given stock transfers to a member twice in the past year. Before that our experience was to sell stock(s) to give to a member withdrawing a portion of their
club shares or a complete withdrawal. No issues with Schwab. We do have to fill out a form and the two co-signers in our club (Treasurer and Assistant Treasurer) have to sign. We are lucky to have a Schwab office nearby where we drop off the form.
Like many clubs, we are planning to closedown this year.
Just members getting older. We are with Schwab with
checking privileges. Obviously, it is simpler to sell
everything and distribute the cash. But some members have
large capital gains and would prefer stock. I have been the
long time treasurer and have been reading the conversations
on here for ideas.
I have some specific questions.
Must all distributions be the same for each member, that is
all cash or all stock?
Is Schwab allowing stock transfers? Hard or easy to work
with them?
Has anyone considered the effect of these large capital
gains on the IRMAA adjustment (Medicare)? Any work around
ideas.
If our club distributes shares, I am considering using a CPA
to do things properly. Or is that overkill and I should be
able to do myself?
What about taking some capital gains this year and doing the
final shutdown next year? Any advantages?
Thanks for your thoughts. I am sure I will be posting again
soon.
Anne Weeks
mp on
Is it at all possible that your club bylaws did (or could be modified to) allow for remaining member(s) to buy out the departing member with OUTSIDE funds?
This is how we anticipated this scenario. Assuming that one or more of the existing members has the $20k to absorb the departing member you can just update the remaining member(s) basis as appropriate. The buyout happens outside the walls of the club. There are no stock transactions and no tax impact on the remaining members or the club. The entire tax impact is on the departing member who presumably is expecting it. I am not a tax advisor or lawyer. Consult a tax professional and get legal advice. May cause drowsiness. Do not operate heavy machinery.
If you sell any stock before the withdrawal date, every member of the club will report their proportional share of the gains on their 2025 personal tax return.
If you give stock, and this is not a full withdrawal, the member receiving the stock will assume the club's cost basis in the shares. This could create more or less capital gain when the shares are sold than a full withdrawal on the same date. The "good" news, if there is any, is that their final capital gain (or loss) on their final withdrawal will be adjusted to account for any accelerated gain from the partial withdrawal.
If you give stock and this is a full withdrawal, the withdrawing member assumes an adjusted cost basis in the shares received which is equal to their tax basis in the club. For the remaining members, their proportional share of the capital gains (had that stock been sold) is locked away and won't be reported until each member makes a full withdrawal from the club.
The foregoing is somewhat simplified as it ignores the treatment of any cash received in the withdrawal.
I need basics. A member is requesting a substantial amount of her money. Not in stocks but in cash. We will have to decide which stock or stocks to sell to come up with $20,000. We have made great decisions on stocks, everything but one is a gain in dollar value as well as dividends. Which means capital gains. Is each member be required to pay capital gains on their taxes or is it just the member who is requesting the payment?
Schwab doesn't allow shares to be distributed to members. The only alternative for transferring stock to members and avoiding the IRMAA adjustment will be to switch your broker to another one that allows stock transfers to members. After the transfer to the new broker you can disband and distribute the stocks and cash. The individual members now have the choice to sell the amount of stocks each year to avoid the IRMAA and higher tax on capital gains.
Could you please provide the Schwab form number. You are the first investment club that has been able to perform a stock transfer to a member that has reported through club cafe. We have been told that Schwab will not transfer stock from an investment Club to a member.
Our club, The Bear Trap Co., switched to Schwab when TD Ameritrade ended a few years ago. We have given stock transfers to a member twice in the past year. Before that our experience was to sell stock(s) to give to a member withdrawing a portion of their
club shares or a complete withdrawal. No issues with Schwab. We do have to fill out a form and the two co-signers in our club (Treasurer and Assistant Treasurer) have to sign. We are lucky to have a Schwab office nearby where we drop off the form.
Like many clubs, we are planning to closedown this year.
Just members getting older. We are with Schwab with
checking privileges. Obviously, it is simpler to sell
everything and distribute the cash. But some members have
large capital gains and would prefer stock. I have been the
long time treasurer and have been reading the conversations
on here for ideas.
I have some specific questions.
Must all distributions be the same for each member, that is
all cash or all stock?
Is Schwab allowing stock transfers? Hard or easy to work
with them?
Has anyone considered the effect of these large capital
gains on the IRMAA adjustment (Medicare)? Any work around
ideas.
If our club distributes shares, I am considering using a CPA
to do things properly. Or is that overkill and I should be
able to do myself?
What about taking some capital gains this year and doing the
final shutdown next year? Any advantages?
Thanks for your thoughts. I am sure I will be posting again
soon.
Anne Weeks
Kolb, George on
I know this has taken a bit of a tangent from the original question, but I wanted to caution that this approach does not need to (nor should it) happen "outside the walls of
the club." If you have member(s) who are willing to "buy in" the funding necessary to cover a withdrawing member, that shouldn't require anything special in the bylaws. Essentially, existing member(s) invest $20K into the club and instead of investing those
funds, you use the money to effect a cash withdrawal to the departing member. It's as simple as that (the hard part is whether you have existing members willing and able to pony up $20K).
If your partnership agreement has a cap on the percentage ownership any one member can have, just be sure not to violate that provision. Otherwise, it's no different than having
enough cash on hand to pay out a departing partner - you simply need enough people willing to invest that much money on short notice rather than selling off existing stocks. This approach is an option whether you need to come up with $2K or $20K for a withdrawal.
The existing members putting new money in receive units in the club just like they would with any other monthly investment, and the departing member's cash withdrawal is handled like any other cash withdrawal. There is no tax impact to the remaining members
in this scenario - only the departing member.
George Kolb
Blue Chips & Salsa
From: club_cafe@bivio.com <club_cafe@bivio.com>
On Behalf Of mp via bivio.com Sent: Monday, June 9, 2025 11:44 AM To: club_cafe@bivio.com Subject: Re: [club_cafe] Closing club
[External Email]
Is it at all possible that your club bylaws did (or could be modified to) allow for remaining member(s) to buy out the departing member with OUTSIDE funds?
This is how we anticipated this scenario. Assuming that one or more of the existing members has the $20k to absorb the departing member you can just update the remaining member(s) basis as appropriate. The buyout happens outside the walls
of the club. There are no stock transactions and no tax impact on the remaining members or the club. The entire tax impact is on the departing member who presumably is expecting it. I am not a tax advisor or lawyer. Consult a tax professional and get legal
advice. May cause drowsiness. Do not operate heavy machinery.
If you sell any stock before the withdrawal date, every member of the club will report their proportional share of the gains on their 2025 personal tax return.
If you give stock, and this is not a full withdrawal, the member receiving the stock will assume the club's cost basis in the shares. This could create more or less capital gain when the shares are sold than a full withdrawal on the same
date. The "good" news, if there is any, is that their final capital gain (or loss) on their final withdrawal will be adjusted to account for any accelerated gain from the partial withdrawal.
If you give stock and this is a full withdrawal, the withdrawing member assumes an adjusted cost basis in the shares received which is equal to their tax basis in the club. For the remaining members, their proportional share of the capital
gains (had that stock been sold) is locked away and won't be reported until each member makes a full withdrawal from the club.
The foregoing is somewhat simplified as it ignores the treatment of any cash received in the withdrawal.
I need basics. A member is requesting a substantial amount of her money. Not in stocks but in cash. We will have to decide which stock or stocks to sell to come up with $20,000. We have made great decisions on stocks, everything but one
is a gain in dollar value as well as dividends. Which means capital gains. Is each member be required to pay capital gains on their taxes or is it just the member who is requesting the payment?
Schwab doesn't allow shares to be distributed to members. The only alternative for transferring stock to members and avoiding the IRMAA adjustment will be to switch your broker to another one that allows stock transfers to members. After
the transfer to the new broker you can disband and distribute the stocks and cash. The individual members now have the choice to sell the amount of stocks each year to avoid the IRMAA and higher tax on capital gains.
Could you please provide the Schwab form number. You are the first investment club that has been able to perform a stock transfer to a member that has reported through club cafe. We have been told that Schwab will not transfer stock from an investment
Club to a member.
Our club, The Bear Trap Co., switched to Schwab when TD Ameritrade ended a few years ago. We have given stock transfers to a member twice in the past year. Before that our experience
was to sell stock(s) to give to a member withdrawing a portion of their club shares or a complete withdrawal. No issues with Schwab. We do have to fill out a form and the two co-signers in our club (Treasurer and Assistant Treasurer) have to sign. We are
lucky to have a Schwab office nearby where we drop off the form.
Like many clubs, we are planning to closedown this year.
Just members getting older. We are with Schwab with
checking privileges. Obviously, it is simpler to sell
everything and distribute the cash. But some members have
large capital gains and would prefer stock. I have been the
long time treasurer and have been reading the conversations
on here for ideas.
I have some specific questions.
Must all distributions be the same for each member, that is
all cash or all stock?
Is Schwab allowing stock transfers? Hard or easy to work
with them?
Has anyone considered the effect of these large capital
gains on the IRMAA adjustment (Medicare)? Any work around
ideas.
If our club distributes shares, I am considering using a CPA
to do things properly. Or is that overkill and I should be
able to do myself?
What about taking some capital gains this year and doing the
final shutdown next year? Any advantages?
Thanks for your thoughts. I am sure I will be posting again
soon.
Anne Weeks
Robert Shaw on
The departing member may have to pay taxes on their gain.
The withdrawal forms will spell this out.
Bob shaw
CSIC
On Jun 9, 2025, at 1:25â¯PM, Kolb, George via bivio.com <user*24878100001@bivio.com> wrote:
I know this has taken a bit of a tangent from the original question, but I wanted to caution that this approach does not need to (nor should it) happen "outside the walls of the club." If you have member(s) who are willing to "buy in" the funding necessary to cover a withdrawing member, that shouldn't require anything special in the bylaws. Essentially, existing member(s) invest $20K into the club and instead of investing those funds, you use the money to effect a cash withdrawal to the departing member. It's as simple as that (the hard part is whether you have existing members willing and able to pony up $20K).
If your partnership agreement has a cap on the percentage ownership any one member can have, just be sure not to violate that provision. Otherwise, it's no different than having enough cash on hand to pay out a departing partner - you simply need enough people willing to invest that much money on short notice rather than selling off existing stocks. This approach is an option whether you need to come up with $2K or $20K for a withdrawal. The existing members putting new money in receive units in the club just like they would with any other monthly investment, and the departing member's cash withdrawal is handled like any other cash withdrawal. There is no tax impact to the remaining members in this scenario - only the departing member.
Is it at all possible that your club bylaws did (or could be modified to) allow for remaining member(s) to buy out the departing member with OUTSIDE funds?
This is how we anticipated this scenario. Assuming that one or more of the existing members has the $20k to absorb the departing member you can just update the remaining member(s) basis as appropriate. The buyout happens outside the walls of the club. There are no stock transactions and no tax impact on the remaining members or the club. The entire tax impact is on the departing member who presumably is expecting it. I am not a tax advisor or lawyer. Consult a tax professional and get legal advice. May cause drowsiness. Do not operate heavy machinery.
If you sell any stock before the withdrawal date, every member of the club will report their proportional share of the gains on their 2025 personal tax return.
If you give stock, and this is not a full withdrawal, the member receiving the stock will assume the club's cost basis in the shares. This could create more or less capital gain when the shares are sold than a full withdrawal on the same date. The "good" news, if there is any, is that their final capital gain (or loss) on their final withdrawal will be adjusted to account for any accelerated gain from the partial withdrawal.
If you give stock and this is a full withdrawal, the withdrawing member assumes an adjusted cost basis in the shares received which is equal to their tax basis in the club. For the remaining members, their proportional share of the capital gains (had that stock been sold) is locked away and won't be reported until each member makes a full withdrawal from the club.
The foregoing is somewhat simplified as it ignores the treatment of any cash received in the withdrawal.
I need basics. A member is requesting a substantial amount of her money. Not in stocks but in cash. We will have to decide which stock or stocks to sell to come up with $20,000. We have made great decisions on stocks, everything but one is a gain in dollar value as well as dividends. Which means capital gains. Is each member be required to pay capital gains on their taxes or is it just the member who is requesting the payment?
Schwab doesn't allow shares to be distributed to members. The only alternative for transferring stock to members and avoiding the IRMAA adjustment will be to switch your broker to another one that allows stock transfers to members. After the transfer to the new broker you can disband and distribute the stocks and cash. The individual members now have the choice to sell the amount of stocks each year to avoid the IRMAA and higher tax on capital gains.
Could you please provide the Schwab form number. You are the first investment club that has been able to perform a stock transfer to a member that has reported through club cafe. We have been told that Schwab will not transfer stock from an investment Club to a member.
Our club, The Bear Trap Co., switched to Schwab when TD Ameritrade ended a few years ago. We have given stock transfers to a member twice in the past year. Before that our experience was to sell stock(s) to give to a member withdrawing a portion of their club shares or a complete withdrawal. No issues with Schwab. We do have to fill out a form and the two co-signers in our club (Treasurer and Assistant Treasurer) have to sign. We are lucky to have a Schwab office nearby where we drop off the form.
Like many clubs, we are planning to closedown this year. Just members getting older. We are with Schwab with checking privileges. Obviously, it is simpler to sell everything and distribute the cash. But some members have large capital gains and would prefer stock. I have been the long time treasurer and have been reading the conversations on here for ideas.
I have some specific questions. Must all distributions be the same for each member, that is all cash or all stock? Is Schwab allowing stock transfers? Hard or easy to work with them? Has anyone considered the effect of these large capital gains on the IRMAA adjustment (Medicare)? Any work around ideas. If our club distributes shares, I am considering using a CPA to do things properly. Or is that overkill and I should be able to do myself? What about taking some capital gains this year and doing the final shutdown next year? Any advantages? Thanks for your thoughts. I am sure I will be posting again soon. Anne Weeks
Roman Geletkanycz on
There is a valuation problem in this. If the club has appreciated stock and the departing member has a valuation of $25000 (just using this amount for the example), then what amount would you pay them? If you give them the whole $25000 then they will not pay any tax on the stock appreciation in the portfolio which will be paid by remaining members when the stock is eventually sold or transferred to them. Would you give them the $25000 less an amount estimated for future capital gain taxes? The estimate will never be exact.
There are 2 components of tax liability for every partner:
- First, the gain / loss and interest & dividend activity of investments as realized each year
- Second, the net gain or loss of their ultimate total withdrawals versus their total capital injections to the club over the years.
Unless you adjust the valuation of the cash withdrawal for the first type of tax I note above, they will not be accountable for it and the remaining members will ultimately absorb the amount.
The best solution is to follow your Partnership Agreement and if it is in cash, sell some of the holdings to generate the needed funds. Keep it simple!!!
Roman
Newfane Investment Partners
On Monday, June 9, 2025 at 01:26:59 PM EDT, Kolb, George via bivio.com <user*24878100001@bivio.com> wrote:
I know this has taken a bit of a tangent from the original question, but I wanted to caution that this approach does not need to (nor should it) happen "outside the walls of
the club." If you have member(s) who are willing to "buy in" the funding necessary to cover a withdrawing member, that shouldn't require anything special in the bylaws. Essentially, existing member(s) invest $20K into the club and instead of investing those
funds, you use the money to effect a cash withdrawal to the departing member. It's as simple as that (the hard part is whether you have existing members willing and able to pony up $20K).
If your partnership agreement has a cap on the percentage ownership any one member can have, just be sure not to violate that provision. Otherwise, it's no different than having
enough cash on hand to pay out a departing partner - you simply need enough people willing to invest that much money on short notice rather than selling off existing stocks. This approach is an option whether you need to come up with $2K or $20K for a withdrawal.
The existing members putting new money in receive units in the club just like they would with any other monthly investment, and the departing member's cash withdrawal is handled like any other cash withdrawal. There is no tax impact to the remaining members
in this scenario - only the departing member.
George Kolb
Blue Chips & Salsa
From: club_cafe@bivio.com <club_cafe@bivio.com>
On Behalf Of mp via bivio.com Sent: Monday, June 9, 2025 11:44 AM To: club_cafe@bivio.com Subject: Re: [club_cafe] Closing club
[External Email]
Is it at all possible that your club bylaws did (or could be modified to) allow for remaining member(s) to buy out the departing member with OUTSIDE funds?
This is how we anticipated this scenario. Assuming that one or more of the existing members has the $20k to absorb the departing member you can just update the remaining member(s) basis as appropriate. The buyout happens outside the walls
of the club. There are no stock transactions and no tax impact on the remaining members or the club. The entire tax impact is on the departing member who presumably is expecting it. I am not a tax advisor or lawyer. Consult a tax professional and get legal
advice. May cause drowsiness. Do not operate heavy machinery.
If you sell any stock before the withdrawal date, every member of the club will report their proportional share of the gains on their 2025 personal tax return.
If you give stock, and this is not a full withdrawal, the member receiving the stock will assume the club's cost basis in the shares. This could create more or less capital gain when the shares are sold than a full withdrawal on the same
date. The "good" news, if there is any, is that their final capital gain (or loss) on their final withdrawal will be adjusted to account for any accelerated gain from the partial withdrawal.
If you give stock and this is a full withdrawal, the withdrawing member assumes an adjusted cost basis in the shares received which is equal to their tax basis in the club. For the remaining members, their proportional share of the capital
gains (had that stock been sold) is locked away and won't be reported until each member makes a full withdrawal from the club.
The foregoing is somewhat simplified as it ignores the treatment of any cash received in the withdrawal.
I need basics. A member is requesting a substantial amount of her money. Not in stocks but in cash. We will have to decide which stock or stocks to sell to come up with $20,000. We have made great decisions on stocks, everything but one
is a gain in dollar value as well as dividends. Which means capital gains. Is each member be required to pay capital gains on their taxes or is it just the member who is requesting the payment?
Schwab doesn't allow shares to be distributed to members. The only alternative for transferring stock to members and avoiding the IRMAA adjustment will be to switch your broker to another one that allows stock transfers to members. After
the transfer to the new broker you can disband and distribute the stocks and cash. The individual members now have the choice to sell the amount of stocks each year to avoid the IRMAA and higher tax on capital gains.
Could you please provide the Schwab form number. You are the first investment club that has been able to perform a stock transfer to a member that has reported through club cafe. We have been told that Schwab will not transfer stock from an investment
Club to a member.
Our club, The Bear Trap Co., switched to Schwab when TD Ameritrade ended a few years ago. We have given stock transfers to a member twice in the past year. Before that our experience
was to sell stock(s) to give to a member withdrawing a portion of their club shares or a complete withdrawal. No issues with Schwab. We do have to fill out a form and the two co-signers in our club (Treasurer and Assistant Treasurer) have to sign. We are
lucky to have a Schwab office nearby where we drop off the form.
Like many clubs, we are planning to closedown this year.
Just members getting older. We are with Schwab with
checking privileges. Obviously, it is simpler to sell
everything and distribute the cash. But some members have
large capital gains and would prefer stock. I have been the
long time treasurer and have been reading the conversations
on here for ideas.
I have some specific questions.
Must all distributions be the same for each member, that is
all cash or all stock?
Is Schwab allowing stock transfers? Hard or easy to work
with them?
Has anyone considered the effect of these large capital
gains on the IRMAA adjustment (Medicare)? Any work around
ideas.
If our club distributes shares, I am considering using a CPA
to do things properly. Or is that overkill and I should be
able to do myself?
What about taking some capital gains this year and doing the
final shutdown next year? Any advantages?
Thanks for your thoughts. I am sure I will be posting again
soon.
Anne Weeks
Janice on
My understanding is that Bivio's Withdrawal form figures that all out. When stock was transferred to me, my cost basis was the club's basis (very low). I had to call my broker to adjust the 'higher' appreciated cost basis.
On Jun 9, 2025, at 12:19â¯PM, Roman Geletkanycz via bivio.com <user*33583000001@bivio.com> wrote:
There is a valuation problem in this. If the club has appreciated stock and the departing member has a valuation of $25000 (just using this amount for the example), then what amount would you pay them? If you give them the whole $25000 then they will not pay any tax on the stock appreciation in the portfolio which will be paid by remaining members when the stock is eventually sold or transferred to them. Would you give them the $25000 less an amount estimated for future capital gain taxes? The estimate will never be exact.
There are 2 components of tax liability for every partner:
- First, the gain / loss and interest & dividend activity of investments as realized each year
- Second, the net gain or loss of their ultimate total withdrawals versus their total capital injections to the club over the years.
Unless you adjust the valuation of the cash withdrawal for the first type of tax I note above, they will not be accountable for it and the remaining members will ultimately absorb the amount.
The best solution is to follow your Partnership Agreement and if it is in cash, sell some of the holdings to generate the needed funds. Keep it simple!!!
Roman
Newfane Investment Partners
On Monday, June 9, 2025 at 01:26:59 PM EDT, Kolb, George via bivio.com <user*24878100001@bivio.com> wrote:
I know this has taken a bit of a tangent from the original question, but I wanted to caution that this approach does not need to (nor should it) happen "outside the walls of
the club." If you have member(s) who are willing to "buy in" the funding necessary to cover a withdrawing member, that shouldn't require anything special in the bylaws. Essentially, existing member(s) invest $20K into the club and instead of investing those
funds, you use the money to effect a cash withdrawal to the departing member. It's as simple as that (the hard part is whether you have existing members willing and able to pony up $20K).
If your partnership agreement has a cap on the percentage ownership any one member can have, just be sure not to violate that provision. Otherwise, it's no different than having
enough cash on hand to pay out a departing partner - you simply need enough people willing to invest that much money on short notice rather than selling off existing stocks. This approach is an option whether you need to come up with $2K or $20K for a withdrawal.
The existing members putting new money in receive units in the club just like they would with any other monthly investment, and the departing member's cash withdrawal is handled like any other cash withdrawal. There is no tax impact to the remaining members
in this scenario - only the departing member.
George Kolb
Blue Chips & Salsa
From: club_cafe@bivio.com <club_cafe@bivio.com>
On Behalf Of mp via bivio.com Sent: Monday, June 9, 2025 11:44 AM To: club_cafe@bivio.com Subject: Re: [club_cafe] Closing club
[External Email]
Is it at all possible that your club bylaws did (or could be modified to) allow for remaining member(s) to buy out the departing member with OUTSIDE funds?
This is how we anticipated this scenario. Assuming that one or more of the existing members has the $20k to absorb the departing member you can just update the remaining member(s) basis as appropriate. The buyout happens outside the walls
of the club. There are no stock transactions and no tax impact on the remaining members or the club. The entire tax impact is on the departing member who presumably is expecting it. I am not a tax advisor or lawyer. Consult a tax professional and get legal
advice. May cause drowsiness. Do not operate heavy machinery.
If you sell any stock before the withdrawal date, every member of the club will report their proportional share of the gains on their 2025 personal tax return.
If you give stock, and this is not a full withdrawal, the member receiving the stock will assume the club's cost basis in the shares. This could create more or less capital gain when the shares are sold than a full withdrawal on the same
date. The "good" news, if there is any, is that their final capital gain (or loss) on their final withdrawal will be adjusted to account for any accelerated gain from the partial withdrawal.
If you give stock and this is a full withdrawal, the withdrawing member assumes an adjusted cost basis in the shares received which is equal to their tax basis in the club. For the remaining members, their proportional share of the capital
gains (had that stock been sold) is locked away and won't be reported until each member makes a full withdrawal from the club.
The foregoing is somewhat simplified as it ignores the treatment of any cash received in the withdrawal.
I need basics. A member is requesting a substantial amount of her money. Not in stocks but in cash. We will have to decide which stock or stocks to sell to come up with $20,000. We have made great decisions on stocks, everything but one
is a gain in dollar value as well as dividends. Which means capital gains. Is each member be required to pay capital gains on their taxes or is it just the member who is requesting the payment?
Schwab doesn't allow shares to be distributed to members. The only alternative for transferring stock to members and avoiding the IRMAA adjustment will be to switch your broker to another one that allows stock transfers to members. After
the transfer to the new broker you can disband and distribute the stocks and cash. The individual members now have the choice to sell the amount of stocks each year to avoid the IRMAA and higher tax on capital gains.
Could you please provide the Schwab form number. You are the first investment club that has been able to perform a stock transfer to a member that has reported through club cafe. We have been told that Schwab will not transfer stock from an investment
Club to a member.
Our club, The Bear Trap Co., switched to Schwab when TD Ameritrade ended a few years ago. We have given stock transfers to a member twice in the past year. Before that our experience
was to sell stock(s) to give to a member withdrawing a portion of their club shares or a complete withdrawal. No issues with Schwab. We do have to fill out a form and the two co-signers in our club (Treasurer and Assistant Treasurer) have to sign. We are
lucky to have a Schwab office nearby where we drop off the form.
Like many clubs, we are planning to closedown this year.
Just members getting older. We are with Schwab with
checking privileges. Obviously, it is simpler to sell
everything and distribute the cash. But some members have
large capital gains and would prefer stock. I have been the
long time treasurer and have been reading the conversations
on here for ideas.
I have some specific questions.
Must all distributions be the same for each member, that is
all cash or all stock?
Is Schwab allowing stock transfers? Hard or easy to work
with them?
Has anyone considered the effect of these large capital
gains on the IRMAA adjustment (Medicare)? Any work around
ideas.
If our club distributes shares, I am considering using a CPA
to do things properly. Or is that overkill and I should be
able to do myself?
What about taking some capital gains this year and doing the
final shutdown next year? Any advantages?
Thanks for your thoughts. I am sure I will be posting again
soon.
Anne Weeks
sharon kulkis on
Bivio figures that all out and is reflected in the K1
On Mon, Jun 9, 2025 at 3:20 PM, Roman Geletkanycz via bivio.com
<user*33583000001@bivio.com> wrote:
There is a valuation problem in this. If the club has appreciated stock and the departing member has a valuation of $25000 (just using this amount for the example), then what amount would you pay them? If you give them the whole $25000 then they will not pay any tax on the stock appreciation in the portfolio which will be paid by remaining members when the stock is eventually sold or transferred to them. Would you give them the $25000 less an amount estimated for future capital gain taxes? The estimate will never be exact.
There are 2 components of tax liability for every partner:
- First, the gain / loss and interest & dividend activity of investments as realized each year
- Second, the net gain or loss of their ultimate total withdrawals versus their total capital injections to the club over the years.
Unless you adjust the valuation of the cash withdrawal for the first type of tax I note above, they will not be accountable for it and the remaining members will ultimately absorb the amount.
The best solution is to follow your Partnership Agreement and if it is in cash, sell some of the holdings to generate the needed funds. Keep it simple!!!
Roman
Newfane Investment Partners
On Monday, June 9, 2025 at 01:26:59 PM EDT, Kolb, George via bivio.com <user*24878100001@bivio.com> wrote:
I know this has taken a bit of a tangent from the original question, but I wanted to caution that this approach does not need to (nor should it) happen "outside the walls of
the club." If you have member(s) who are willing to "buy in" the funding necessary to cover a withdrawing member, that shouldn't require anything special in the bylaws. Essentially, existing member(s) invest $20K into the club and instead of investing those
funds, you use the money to effect a cash withdrawal to the departing member. It's as simple as that (the hard part is whether you have existing members willing and able to pony up $20K).
If your partnership agreement has a cap on the percentage ownership any one member can have, just be sure not to violate that provision. Otherwise, it's no different than having
enough cash on hand to pay out a departing partner - you simply need enough people willing to invest that much money on short notice rather than selling off existing stocks. This approach is an option whether you need to come up with $2K or $20K for a withdrawal.
The existing members putting new money in receive units in the club just like they would with any other monthly investment, and the departing member's cash withdrawal is handled like any other cash withdrawal. There is no tax impact to the remaining members
in this scenario - only the departing member.
George Kolb
Blue Chips & Salsa
From: club_cafe@bivio.com <club_cafe@bivio.com>
On Behalf Of mp via bivio.com Sent: Monday, June 9, 2025 11:44 AM To: club_cafe@bivio.com Subject: Re: [club_cafe] Closing club
[External Email]
Is it at all possible that your club bylaws did (or could be modified to) allow for remaining member(s) to buy out the departing member with OUTSIDE funds?
This is how we anticipated this scenario. Assuming that one or more of the existing members has the $20k to absorb the departing member you can just update the remaining member(s) basis as appropriate. The buyout happens outside the walls
of the club. There are no stock transactions and no tax impact on the remaining members or the club. The entire tax impact is on the departing member who presumably is expecting it. I am not a tax advisor or lawyer. Consult a tax professional and get legal
advice. May cause drowsiness. Do not operate heavy machinery.
If you sell any stock before the withdrawal date, every member of the club will report their proportional share of the gains on their 2025 personal tax return.
If you give stock, and this is not a full withdrawal, the member receiving the stock will assume the club's cost basis in the shares. This could create more or less capital gain when the shares are sold than a full withdrawal on the same
date. The "good" news, if there is any, is that their final capital gain (or loss) on their final withdrawal will be adjusted to account for any accelerated gain from the partial withdrawal.
If you give stock and this is a full withdrawal, the withdrawing member assumes an adjusted cost basis in the shares received which is equal to their tax basis in the club. For the remaining members, their proportional share of the capital
gains (had that stock been sold) is locked away and won't be reported until each member makes a full withdrawal from the club.
The foregoing is somewhat simplified as it ignores the treatment of any cash received in the withdrawal.
I need basics. A member is requesting a substantial amount of her money. Not in stocks but in cash. We will have to decide which stock or stocks to sell to come up with $20,000. We have made great decisions on stocks, everything but one
is a gain in dollar value as well as dividends. Which means capital gains. Is each member be required to pay capital gains on their taxes or is it just the member who is requesting the payment?
Schwab doesn't allow shares to be distributed to members. The only alternative for transferring stock to members and avoiding the IRMAA adjustment will be to switch your broker to another one that allows stock transfers to members. After
the transfer to the new broker you can disband and distribute the stocks and cash. The individual members now have the choice to sell the amount of stocks each year to avoid the IRMAA and higher tax on capital gains.
Could you please provide the Schwab form number. You are the first investment club that has been able to perform a stock transfer to a member that has reported through club cafe. We have been told that Schwab will not transfer stock from an investment
Club to a member.
Our club, The Bear Trap Co., switched to Schwab when TD Ameritrade ended a few years ago. We have given stock transfers to a member twice in the past year. Before that our experience
was to sell stock(s) to give to a member withdrawing a portion of their club shares or a complete withdrawal. No issues with Schwab. We do have to fill out a form and the two co-signers in our club (Treasurer and Assistant Treasurer) have to sign. We are
lucky to have a Schwab office nearby where we drop off the form.
Like many clubs, we are planning to closedown this year.
Just members getting older. We are with Schwab with
checking privileges. Obviously, it is simpler to sell
everything and distribute the cash. But some members have
large capital gains and would prefer stock. I have been the
long time treasurer and have been reading the conversations
on here for ideas.
I have some specific questions.
Must all distributions be the same for each member, that is
all cash or all stock?
Is Schwab allowing stock transfers? Hard or easy to work
with them?
Has anyone considered the effect of these large capital
gains on the IRMAA adjustment (Medicare)? Any work around
ideas.
If our club distributes shares, I am considering using a CPA
to do things properly. Or is that overkill and I should be
able to do myself?
What about taking some capital gains this year and doing the
final shutdown next year? Any advantages?
Thanks for your thoughts. I am sure I will be posting again
soon.
Anne Weeks