Kevin Crouse asks Do member's basis in the club increase due to interest on cash accounts and dividends from stocks owned by the club? Do member's basis in the club increase due to capital gains incurred through the sale of club stocks? Do member's basis ...
From the Trez_Talk mailbag Our broker offered [and our club took advantage of] one free trade [seemingly valued at 19.95] for every $100 electronically transferred from a club member's account to the brokerage account. How is this treated tax-wise? Can the gain be postponed to ...
New clubs often wonder "Do we need to register as a club for legal purposes?" The answer is a resounding YES . Most clubs are established as a partnership. As such, before you open a bank or brokerage account and before you make your first ...
James G. Hawkins wrote: Clubs have expenses other than buying securities. If a member puts money into a club's account (bank account or petty fund) but that money is used for expenses, where does it appear on a report? As the program works now, the ...
Eric Polk asked, Our investment club received a fraction share payment of cash when a stock splitted that we owned. I am confused about if that payment amount is recorded as a dividend payment or is it a net short term capital gain. If it ...
There can be a real imbalance caused by classifying members contributions as fees, if the amounts so classified don't approximate the expenses that they are meant to cover. A question was recently asked Can any one tell me why when you enter dues for two ...
Kevin Crouse follows up on his question about members' basis Does the members' basis change when a member withdraws his interest in the partnership? Does the basis of the stocks the club owns change when a member withdraws his interest in the partnership? The reason ...
Jerry, What is the deal with the rule in partnership agreements about withdrawing partners receiving 97% of the value of their holdings? Why not 100%? Why not 100% minus brokers fees? Camilo Ortiz Generally, there are two reasons why a club may want to charge ...
A previous version of this article had some inaccurate statements, and has been withdrawn. The following is the corrected version. This is the second in a series of articles about Distributions and Taxation of Partnerships. In the first article of this series, I made the ...
I keep thinking that if I could write the perfect treatise on how partnerships are taxed and how withdrawals are treated, that I could be done with the subject once and for all, and could merely refer readers to that perfect treatise . Alas, I ...
The Readers always write <g>. I had said that we would next deal with how to report to the IRS when the amounts you have taken out of the partnership exceed your basis in the club, but there are a number of people who just ...
Melissa asked some very good questions When a member sends in her check, I enter it with the next due date, but does it go into the 'bank' account? We deposit into the bank before we send off to drip accounts. If the check, received ...
Michael asked, I run an investment club and will have a partner is making a full withdrawal. How is that reported on the K-1 since the capital account is on $1,000 but the withdrawal will be $2000? The cash amount paid out in a withdrawal ...
Our trez_talk articles have prompted a few questions (especially when yours truly made some goofs in some of his statements <g>). However, we are never quite sure if we are firing off blanks into outer space or if some one is actually reading this stuff. ...
George Fernett wrote Lately, we have been hearing that we should "incorporate" our club, to protect each individual from any problems (lawsuits, etc) that might occur for whatever reason. Most clubs form as partnerships since the potential risk of liability is very small. Unless a ...