A previous version of this article had some inaccurate statements, and has been withdrawn.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 ...
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 ...
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 ...
We get many questions from clubs that have never used any accounting software as to how they should go about filing a partnership return. A complete treatise on the subject would entail writing a book, but here are some of the more salient points. Federal ...
Bob Atkinson raises some questions about member buy outs. We just received our first withdrawal notice today from a member of our investment club and we have a well defined process for recognition of the notice, valuation date, methods of payment and timeframe to pay. ...
Jerry, I'm the treasurer of a new club and we are in the process of writing our partnership agreement. Specifically, as treasurer, what issues should I be most concerned with? Member Withdrawals and the Terms of Payment are probably the two most complex issues addressed ...
Jerry, I think the thing that most concerns me (and probably other neophytes) is the legal/tax issues and just what legal forms (partnership agreement?) and tax declarations have to be set up before you can actually start collecting and investing funds. Bernard Bruns Actually, this ...
Jerry, I'm the treasurer of a new club and we are in the process of writing our partnership agreement. Specifically, as treasurer, what issues should I be most concerned with? Today, as we continue, let's look at the provisions in a partnership agreement that pertain ...
Brian Wilhelm asks, We just started an investment club at the beginnig of this month. We were curious about the tax implications for this coming year, most notably the Tax ID number. Is the Tax ID number something we need to apply for now, before ...