Does Your Club Own Celgene?
Sorry my previous comment was sent before I was finished.
I started to say that ETF's, as well as funds, can have non-qualified dividends, and possibly non-dividend and capital gain distributions. You won't know any of this until February when you get the 1099 from the broker. Then you need to go back and change entries in Bivio to account for various types of income. This can affect the valuation of any withdrawals you processed. Many times the 1099's are corrected at a later date and you can receive it months later, requiring an amended return. Many times the December distributions are not received until later in January, but are taxable for the previous year. That can make doing the Bivio tax return difficult.
Do not invest in Bonds or tax-free bonds. Bonds can have OID, premium acquisition, amortization premiums, accrued interest paid, etc., which can make reporting in Bivio a nightmare. These amounts show on the 1099, but Bivio is not equipped to handle much of this. They cannot handle the percent of treasury bonds from the federal money market fund (where your cash is sitting) so that the state return will show this as a subtraction and put it on the state K-1. Bivio has a lot of limitations when it comes to producing a tax return.
If people want to invest in things other than stocks, they should do it in their own accounts, not in an investment club.
Even bond funds will require some manual adjustments.
If you need to use an outside accountant to prepare the club tax return, it will cost you a lot of money since the return is difficult to produce with the same results as Bivio. All items must be manually entered for each member for their K-1's.
Make life easier and stick to stocks. You can trade options, but they can be difficult to reconcile to the brokerage statement at year end.
Linda Wiltse
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Norm Blizard via bivio.com
Sent: Monday, August 05, 2019 7:43 PM
To: club_cafe@bivio.com
Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?
Could I ask someone in the cafe to publish a simple list of do's and don't (or stay away from) when it comes to investing in ETFs, REITS, Bonds, etc. for an investment club using Bivio accounting? Some of our members want to go beyond stocks.
Thanks
Norm C Blizard
Sr Partner, Senior Center Services Investment Club, Columbus IN
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ROBERT DEIMLING via bivio.com
Sent: Monday, August 5, 2019 1:48 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
No
On Friday, August 2, 2019, 7:41:29 PM EDT, Margaret Wentworth via bivio.com <user*25964300001@bivio.com> wrote:
I'n With you, Irene. I had responses from my members and sold the same day. We once bought a MLP by mistake and had to have my accountant do our taxes. Never again.
Thanks to Laurie for the heads up.
Peg Wentworth
Women's Investment Network
On Fri, Aug 2, 2019 at 2:14 PM Irina Clements via bivio.com <user*29448700001@bivio.com> wrote:
As soon as I got Laurie's info email, Celgene became analogous to a REIT or an MLP, which are unsuitable investments for clubs and, as the treasurer I pushed hard for the club's immediate sale.
Typical investments and club life cycle events are challenging enough without adding manual tracking and transactions by the treasurer.
I am relieved.
Irina Clements, Treasurer
Streetbeaters
Best, Irina
On Aug 2, 2019, at 1:13 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
That might help you make a decision, but it will not help you avoid the accounting and valuation issues I described.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to UnsubscribeOn Fri, Aug 2, 2019 at 12:31 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Thanks Laurie. My opinion was based on discounting the CVRs to zero. That will not be reality but I think that is the better way to analyze a buy or sell decision, especially since the payout is binary (all or nothing).
Peter Dunkelberger
On Fri, Aug 2, 2019 at 12:21 PM Laurie Frederiksen <laurie@bivio.biz> wrote:
This is completely different than a stock you'd receive in a spinoff that represents shares in a company.
This is more like an option or a warrant that has a fixed point in time when it will become worthless unless certain targets are met. Its value will depend on whether or not people who own it feel those targets will be met and how much of a market there is for the rights.
Analyzing whether it will be a good investment for your club will require different skills than analyzing a company. It will probably be thinly traded and more volatile than stock in a regular company, making it that much harder to put a good price on. Daily closing prices may be fairly far off from what your club could get if it decided to sell the CVR's after the fact.
This will add uncertainty to your club accounting for transactions that require a good club valuation such as determining member payouts for a withdrawal. Since you may not have a good price on the value of the rights, you could over or underpay someone. Member units received for contributions may vary more than they might also, affecting your club ownership and tax reporting.
It is obviously up to you to determine how you want to proceed. Our goal is to just raise awareness of the issue while there is still time to avoid it.Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
Qualified and non-qualified dividends and distributions are identified at the time of your brokerage statement, and Bivio can distinguish between those at tax time. So I am not convinced that ETFs should be avoided.
We avoid mutual funds for any number of reasons, primarily because of high cost and low performance.
We had an MLP, and indeed, the tax reporting was a monumental headache. I would avoid it unless your club was convinced that it would make all of its members wealthy and so can afford outside tax preparation.
I still think Celgene will not be the headache that some have projected. If the CVR is trackable , there will be no headache at all. If it is not trackable, I think a club can punt on valuation and put some reasonable number on it without any criticism at all. I will advise our club to make the decision based only on analysis of Bristol Meyers. The CVR is just unknowable.
We have not done bonds, so Linda's comments are well taken.
What bothers me in a lot of this is the tail wagging the dog. The accounting should be the last consideration (though it can be the killer vote) in the consideration of an investment. And limitations of Bivio have been cropping up a lot lately. Is there any thought that perhaps Bivio needs to up its game? I like the Bivio staff and their interaction with their customers is super. But if clubs are limited in the investments because of bookkeeping limitations, perhaps Bivio should consider that.
Peter Dunkelberger
Sorry my previous comment was sent before I was finished.
I started to say that ETF's, as well as funds, can have non-qualified dividends, and possibly non-dividend and capital gain distributions. You won't know any of this until February when you get the 1099 from the broker. Then you need to go back and change entries in Bivio to account for various types of income. This can affect the valuation of any withdrawals you processed. Many times the 1099's are corrected at a later date and you can receive it months later, requiring an amended return. Many times the December distributions are not received until later in January, but are taxable for the previous year. That can make doing the Bivio tax return difficult.
Do not invest in Bonds or tax-free bonds. Bonds can have OID, premium acquisition, amortization premiums, accrued interest paid, etc., which can make reporting in Bivio a nightmare. These amounts show on the 1099, but Bivio is not equipped to handle much of this. They cannot handle the percent of treasury bonds from the federal money market fund (where your cash is sitting) so that the state return will show this as a subtraction and put it on the state K-1. Bivio has a lot of limitations when it comes to producing a tax return.
If people want to invest in things other than stocks, they should do it in their own accounts, not in an investment club.
Even bond funds will require some manual adjustments.
If you need to use an outside accountant to prepare the club tax return, it will cost you a lot of money since the return is difficult to produce with the same results as Bivio. All items must be manually entered for each member for their K-1's.
Make life easier and stick to stocks. You can trade options, but they can be difficult to reconcile to the brokerage statement at year end.
Linda Wiltse
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Norm Blizard via bivio.com
Sent: Monday, August 05, 2019 7:43 PM
To: club_cafe@bivio.com
Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?
Could I ask someone in the cafe to publish a simple list of do's and don't (or stay away from) when it comes to investing in ETFs, REITS, Bonds, etc. for an investment club using Bivio accounting? Some of our members want to go beyond stocks.
Thanks
Norm C Blizard
Sr Partner, Senior Center Services Investment Club, Columbus IN
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ROBERT DEIMLING via bivio.com
Sent: Monday, August 5, 2019 1:48 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
No
On Friday, August 2, 2019, 7:41:29 PM EDT, Margaret Wentworth via bivio.com <user*25964300001@bivio.com> wrote:
I'n With you, Irene. I had responses from my members and sold the same day. We once bought a MLP by mistake and had to have my accountant do our taxes. Never again.
Thanks to Laurie for the heads up.
Peg Wentworth
Women's Investment Network
On Fri, Aug 2, 2019 at 2:14 PM Irina Clements via bivio.com <user*29448700001@bivio.com> wrote:
As soon as I got Laurie's info email, Celgene became analogous to a REIT or an MLP, which are unsuitable investments for clubs and, as the treasurer I pushed hard for the club's immediate sale.
Typical investments and club life cycle events are challenging enough without adding manual tracking and transactions by the treasurer.
I am relieved.
Irina Clements, Treasurer
Streetbeaters
Best, Irina
On Aug 2, 2019, at 1:13 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
That might help you make a decision, but it will not help you avoid the accounting and valuation issues I described.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
On Fri, Aug 2, 2019 at 12:31 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Thanks Laurie. My opinion was based on discounting the CVRs to zero. That will not be reality but I think that is the better way to analyze a buy or sell decision, especially since the payout is binary (all or nothing).
Peter Dunkelberger
On Fri, Aug 2, 2019 at 12:21 PM Laurie Frederiksen <laurie@bivio.biz> wrote:
This is completely different than a stock you'd receive in a spinoff that represents shares in a company.
This is more like an option or a warrant that has a fixed point in time when it will become worthless unless certain targets are met. Its value will depend on whether or not people who own it feel those targets will be met and how much of a market there is for the rights.
Analyzing whether it will be a good investment for your club will require different skills than analyzing a company. It will probably be thinly traded and more volatile than stock in a regular company, making it that much harder to put a good price on. Daily closing prices may be fairly far off from what your club could get if it decided to sell the CVR's after the fact.
This will add uncertainty to your club accounting for transactions that require a good club valuation such as determining member payouts for a withdrawal. Since you may not have a good price on the value of the rights, you could over or underpay someone. Member units received for contributions may vary more than they might also, affecting your club ownership and tax reporting.
It is obviously up to you to determine how you want to proceed. Our goal is to just raise awareness of the issue while there is still time to avoid it.Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
Speaking as a treasurer who has had people
leave simultaneously, or in quick succession,
pass away, or just depart in a snit, over my tenures
of treasuring [sic], there are multiple ways for
club accounting to get complicated, fast.
Add delays over cooperation with a broker account number
for stock transfers and issues can compound.
Layering complicated stock accounting over that
fabric of people issues unnecessarily complicates things.
My $0.02 on club purpose, but it is education first. Club members
can always buy any investment they wish in their own portfolio, but leave
the MLPs and REITs off the club portfolio.
How much support and coding bandwidth to
devote to such complex issues is a bivio business decision.
Tiered support for those clubs that want more complex
transactions works for my club very well. There is
always an accountant for those clubs so inclined.
Irina Clements
Treasurer, Streetbeaters
Qualified and non-qualified dividends and distributions are identified at the time of your brokerage statement, and Bivio can distinguish between those at tax time. So I am not convinced that ETFs should be avoided.We avoid mutual funds for any number of reasons, primarily because of high cost and low performance.We had an MLP, and indeed, the tax reporting was a monumental headache. I would avoid it unless your club was convinced that it would make all of its members wealthy and so can afford outside tax preparation.I still think Celgene will not be the headache that some have projected. If the CVR is trackable , there will be no headache at all. If it is not trackable, I think a club can punt on valuation and put some reasonable number on it without any criticism at all. I will advise our club to make the decision based only on analysis of Bristol Meyers. The CVR is just unknowable.We have not done bonds, so Linda's comments are well taken.What bothers me in a lot of this is the tail wagging the dog. The accounting should be the last consideration (though it can be the killer vote) in the consideration of an investment. And limitations of Bivio have been cropping up a lot lately. Is there any thought that perhaps Bivio needs to up its game? I like the Bivio staff and their interaction with their customers is super. But if clubs are limited in the investments because of bookkeeping limitations, perhaps Bivio should consider that.Peter DunkelbergerSorry my previous comment was sent before I was finished.
I started to say that ETF's, as well as funds, can have non-qualified dividends, and possibly non-dividend and capital gain distributions. You won't know any of this until February when you get the 1099 from the broker. Then you need to go back and change entries in Bivio to account for various types of income. This can affect the valuation of any withdrawals you processed. Many times the 1099's are corrected at a later date and you can receive it months later, requiring an amended return. Many times the December distributions are not received until later in January, but are taxable for the previous year. That can make doing the Bivio tax return difficult.
Do not invest in Bonds or tax-free bonds. Bonds can have OID, premium acquisition, amortization premiums, accrued interest paid, etc., which can make reporting in Bivio a nightmare. These amounts show on the 1099, but Bivio is not equipped to handle much of this. They cannot handle the percent of treasury bonds from the federal money market fund (where your cash is sitting) so that the state return will show this as a subtraction and put it on the state K-1. Bivio has a lot of limitations when it comes to producing a tax return.
If people want to invest in things other than stocks, they should do it in their own accounts, not in an investment club.
Even bond funds will require some manual adjustments.
If you need to use an outside accountant to prepare the club tax return, it will cost you a lot of money since the return is difficult to produce with the same results as Bivio. All items must be manually entered for each member for their K-1's.
Make life easier and stick to stocks. You can trade options, but they can be difficult to reconcile to the brokerage statement at year end.
Linda Wiltse
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Norm Blizard via bivio.com
Sent: Monday, August 05, 2019 7:43 PM
To: club_cafe@bivio.com
Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?
Could I ask someone in the cafe to publish a simple list of do's and don't (or stay away from) when it comes to investing in ETFs, REITS, Bonds, etc. for an investment club using Bivio accounting? Some of our members want to go beyond stocks.
Thanks
Norm C Blizard
Sr Partner, Senior Center Services Investment Club, Columbus IN
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ROBERT DEIMLING via bivio.com
Sent: Monday, August 5, 2019 1:48 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
No
On Friday, August 2, 2019, 7:41:29 PM EDT, Margaret Wentworth via bivio.com <user*25964300001@bivio.com> wrote:
I'n With you, Irene. I had responses from my members and sold the same day. We once bought a MLP by mistake and had to have my accountant do our taxes. Never again.
Thanks to Laurie for the heads up.
Peg Wentworth
Women's Investment Network
On Fri, Aug 2, 2019 at 2:14 PM Irina Clements via bivio.com <user*29448700001@bivio.com> wrote:
As soon as I got Laurie's info email, Celgene became analogous to a REIT or an MLP, which are unsuitable investments for clubs and, as the treasurer I pushed hard for the club's immediate sale.
Typical investments and club life cycle events are challenging enough without adding manual tracking and transactions by the treasurer.
I am relieved.
Irina Clements, Treasurer
Streetbeaters
Best, Irina
On Aug 2, 2019, at 1:13 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
That might help you make a decision, but it will not help you avoid the accounting and valuation issues I described.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
On Fri, Aug 2, 2019 at 12:31 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Thanks Laurie. My opinion was based on discounting the CVRs to zero. That will not be reality but I think that is the better way to analyze a buy or sell decision, especially since the payout is binary (all or nothing).
Peter Dunkelberger
On Fri, Aug 2, 2019 at 12:21 PM Laurie Frederiksen <laurie@bivio.biz> wrote:
This is completely different than a stock you'd receive in a spinoff that represents shares in a company.
This is more like an option or a warrant that has a fixed point in time when it will become worthless unless certain targets are met. Its value will depend on whether or not people who own it feel those targets will be met and how much of a market there is for the rights.
Analyzing whether it will be a good investment for your club will require different skills than analyzing a company. It will probably be thinly traded and more volatile than stock in a regular company, making it that much harder to put a good price on. Daily closing prices may be fairly far off from what your club could get if it decided to sell the CVR's after the fact.
This will add uncertainty to your club accounting for transactions that require a good club valuation such as determining member payouts for a withdrawal. Since you may not have a good price on the value of the rights, you could over or underpay someone. Member units received for contributions may vary more than they might also, affecting your club ownership and tax reporting.
It is obviously up to you to determine how you want to proceed. Our goal is to just raise awareness of the issue while there is still time to avoid it.Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
I am wondering if anyone else has trouble, on occasion, with entries not saving in Bivio?
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Irina Clements via bivio.com
Sent: Tuesday, August 6, 2019 7:12 AM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
Speaking as a treasurer who has had people
leave simultaneously, or in quick succession,
pass away, or just depart in a snit, over my tenures
of treasuring [sic], there are multiple ways for
club accounting to get complicated, fast.
Add delays over cooperation with a broker account number
for stock transfers and issues can compound.
Layering complicated stock accounting over that
fabric of people issues unnecessarily complicates things.
My $0.02 on club purpose, but it is education first. Club members
can always buy any investment they wish in their own portfolio, but leave
the MLPs and REITs off the club portfolio.
How much support and coding bandwidth to
devote to such complex issues is a bivio business decision.
Tiered support for those clubs that want more complex
transactions works for my club very well. There is
always an accountant for those clubs so inclined.
Irina Clements
Treasurer, Streetbeaters
On Aug 6, 2019, at 8:42 AM, Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Qualified and non-qualified dividends and distributions are identified at the time of your brokerage statement, and Bivio can distinguish between those at tax time. So I am not convinced that ETFs should be avoided.
We avoid mutual funds for any number of reasons, primarily because of high cost and low performance.
We had an MLP, and indeed, the tax reporting was a monumental headache. I would avoid it unless your club was convinced that it would make all of its members wealthy and so can afford outside tax preparation.
I still think Celgene will not be the headache that some have projected. If the CVR is trackable , there will be no headache at all. If it is not trackable, I think a club can punt on valuation and put some reasonable number on it without any criticism at all. I will advise our club to make the decision based only on analysis of Bristol Meyers. The CVR is just unknowable.
We have not done bonds, so Linda's comments are well taken.
What bothers me in a lot of this is the tail wagging the dog. The accounting should be the last consideration (though it can be the killer vote) in the consideration of an investment. And limitations of Bivio have been cropping up a lot lately. Is there any thought that perhaps Bivio needs to up its game? I like the Bivio staff and their interaction with their customers is super. But if clubs are limited in the investments because of bookkeeping limitations, perhaps Bivio should consider that.
Peter Dunkelberger
On Tue, Aug 6, 2019 at 4:31 AM Linda Wiltse via bivio.com <user*31518000001@bivio.com> wrote:
Sorry my previous comment was sent before I was finished.
I started to say that ETF's, as well as funds, can have non-qualified dividends, and possibly non-dividend and capital gain distributions. You won't know any of this until February when you get the 1099 from the broker. Then you need to go back and change entries in Bivio to account for various types of income. This can affect the valuation of any withdrawals you processed. Many times the 1099's are corrected at a later date and you can receive it months later, requiring an amended return. Many times the December distributions are not received until later in January, but are taxable for the previous year. That can make doing the Bivio tax return difficult.
Do not invest in Bonds or tax-free bonds. Bonds can have OID, premium acquisition, amortization premiums, accrued interest paid, etc., which can make reporting in Bivio a nightmare. These amounts show on the 1099, but Bivio is not equipped to handle much of this. They cannot handle the percent of treasury bonds from the federal money market fund (where your cash is sitting) so that the state return will show this as a subtraction and put it on the state K-1. Bivio has a lot of limitations when it comes to producing a tax return.
If people want to invest in things other than stocks, they should do it in their own accounts, not in an investment club.
Even bond funds will require some manual adjustments.
If you need to use an outside accountant to prepare the club tax return, it will cost you a lot of money since the return is difficult to produce with the same results as Bivio. All items must be manually entered for each member for their K-1's.
Make life easier and stick to stocks. You can trade options, but they can be difficult to reconcile to the brokerage statement at year end.
Linda Wiltse
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Norm Blizard via bivio.com
Sent: Monday, August 05, 2019 7:43 PM
To: club_cafe@bivio.com
Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?
Could I ask someone in the cafe to publish a simple list of do's and don't (or stay away from) when it comes to investing in ETFs, REITS, Bonds, etc. for an investment club using Bivio accounting? Some of our members want to go beyond stocks.
Thanks
Norm C Blizard
Sr Partner, Senior Center Services Investment Club, Columbus IN
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ROBERT DEIMLING via bivio.com
Sent: Monday, August 5, 2019 1:48 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
No
On Friday, August 2, 2019, 7:41:29 PM EDT, Margaret Wentworth via bivio.com <user*25964300001@bivio.com> wrote:
I'n With you, Irene. I had responses from my members and sold the same day. We once bought a MLP by mistake and had to have my accountant do our taxes. Never again.
Thanks to Laurie for the heads up.
Peg Wentworth
Women's Investment Network
On Fri, Aug 2, 2019 at 2:14 PM Irina Clements via bivio.com <user*29448700001@bivio.com> wrote:
As soon as I got Laurie's info email, Celgene became analogous to a REIT or an MLP, which are unsuitable investments for clubs and, as the treasurer I pushed hard for the club's immediate sale.
Typical investments and club life cycle events are challenging enough without adding manual tracking and transactions by the treasurer.
I am relieved.
Irina Clements, Treasurer
Streetbeaters
Best, Irina
On Aug 2, 2019, at 1:13 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
That might help you make a decision, but it will not help you avoid the accounting and valuation issues I described.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
On Fri, Aug 2, 2019 at 12:31 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Thanks Laurie. My opinion was based on discounting the CVRs to zero. That will not be reality but I think that is the better way to analyze a buy or sell decision, especially since the payout is binary (all or nothing).
Peter Dunkelberger
On Fri, Aug 2, 2019 at 12:21 PM Laurie Frederiksen <laurie@bivio.biz> wrote:
This is completely different than a stock you'd receive in a spinoff that represents shares in a company.
This is more like an option or a warrant that has a fixed point in time when it will become worthless unless certain targets are met. Its value will depend on whether or not people who own it feel those targets will be met and how much of a market there is for the rights.
Analyzing whether it will be a good investment for your club will require different skills than analyzing a company. It will probably be thinly traded and more volatile than stock in a regular company, making it that much harder to put a good price on. Daily closing prices may be fairly far off from what your club could get if it decided to sell the CVR's after the fact.
This will add uncertainty to your club accounting for transactions that require a good club valuation such as determining member payouts for a withdrawal. Since you may not have a good price on the value of the rights, you could over or underpay someone. Member units received for contributions may vary more than they might also, affecting your club ownership and tax reporting.
It is obviously up to you to determine how you want to proceed. Our goal is to just raise awareness of the issue while there is still time to avoid it.Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
Virus-free. www.avast.com
I haven't experienced that.
BTW our club only buys stocks. They really work hard and are aware of making Treasurer's job as simple as possible. For which I have much gratitude!!
Kim Potter
BI Brighton Model Club
Michigan
Sent via the Samsung Galaxy S7, an AT&T 4G LTE smartphone
-------- Original message --------
From: "Connie Humble via bivio.com" <user*27031200001@bivio.com>
Date: 8/6/19 11:30 AM (GMT-05:00)
To: club_cafe@bivio.com
Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?
I am wondering if anyone else has trouble, on occasion, with entries not saving in Bivio?
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Irina Clements via bivio.com
Sent: Tuesday, August 6, 2019 7:12 AM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
Speaking as a treasurer who has had people
leave simultaneously, or in quick succession,
pass away, or just depart in a snit, over my tenures
of treasuring [sic], there are multiple ways for
club accounting to get complicated, fast.
Add delays over cooperation with a broker account number
for stock transfers and issues can compound.
Layering complicated stock accounting over that
fabric of people issues unnecessarily complicates things.
My $0.02 on club purpose, but it is education first. Club members
can always buy any investment they wish in their own portfolio, but leave
the MLPs and REITs off the club portfolio.
How much support and coding bandwidth to
devote to such complex issues is a bivio business decision.
Tiered support for those clubs that want more complex
transactions works for my club very well. There is
always an accountant for those clubs so inclined.
Irina Clements
Treasurer, Streetbeaters
On Aug 6, 2019, at 8:42 AM, Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Qualified and non-qualified dividends and distributions are identified at the time of your brokerage statement, and Bivio can distinguish between those at tax time. So I am not convinced that ETFs should be avoided.
We avoid mutual funds for any number of reasons, primarily because of high cost and low performance.
We had an MLP, and indeed, the tax reporting was a monumental headache. I would avoid it unless your club was convinced that it would make all of its members wealthy and so can afford outside tax preparation.
I still think Celgene will not be the headache that some have projected. If the CVR is trackable , there will be no headache at all. If it is not trackable, I think a club can punt on valuation and put some reasonable number on it without any criticism at all. I will advise our club to make the decision based only on analysis of Bristol Meyers. The CVR is just unknowable.
We have not done bonds, so Linda's comments are well taken.
What bothers me in a lot of this is the tail wagging the dog. The accounting should be the last consideration (though it can be the killer vote) in the consideration of an investment. And limitations of Bivio have been cropping up a lot lately. Is there any thought that perhaps Bivio needs to up its game? I like the Bivio staff and their interaction with their customers is super. But if clubs are limited in the investments because of bookkeeping limitations, perhaps Bivio should consider that.
Peter Dunkelberger
On Tue, Aug 6, 2019 at 4:31 AM Linda Wiltse via bivio.com <user*31518000001@bivio.com> wrote:
Sorry my previous comment was sent before I was finished.
I started to say that ETF's, as well as funds, can have non-qualified dividends, and possibly non-dividend and capital gain distributions. You won't know any of this until February when you get the 1099 from the broker. Then you need to go back and change entries in Bivio to account for various types of income. This can affect the valuation of any withdrawals you processed. Many times the 1099's are corrected at a later date and you can receive it months later, requiring an amended return. Many times the December distributions are not received until later in January, but are taxable for the previous year. That can make doing the Bivio tax return difficult.
Do not invest in Bonds or tax-free bonds. Bonds can have OID, premium acquisition, amortization premiums, accrued interest paid, etc., which can make reporting in Bivio a nightmare. These amounts show on the 1099, but Bivio is not equipped to handle much of this. They cannot handle the percent of treasury bonds from the federal money market fund (where your cash is sitting) so that the state return will show this as a subtraction and put it on the state K-1. Bivio has a lot of limitations when it comes to producing a tax return.
If people want to invest in things other than stocks, they should do it in their own accounts, not in an investment club.
Even bond funds will require some manual adjustments.
If you need to use an outside accountant to prepare the club tax return, it will cost you a lot of money since the return is difficult to produce with the same results as Bivio. All items must be manually entered for each member for their K-1's.
Make life easier and stick to stocks. You can trade options, but they can be difficult to reconcile to the brokerage statement at year end.
Linda Wiltse
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Norm Blizard via bivio.com
Sent: Monday, August 05, 2019 7:43 PM
To: club_cafe@bivio.com
Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?
Could I ask someone in the cafe to publish a simple list of do's and don't (or stay away from) when it comes to investing in ETFs, REITS, Bonds, etc. for an investment club using Bivio accounting? Some of our members want to go beyond stocks.
Thanks
Norm C Blizard
Sr Partner, Senior Center Services Investment Club, Columbus IN
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ROBERT DEIMLING via bivio.com
Sent: Monday, August 5, 2019 1:48 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
No
On Friday, August 2, 2019, 7:41:29 PM EDT, Margaret Wentworth via bivio.com <user*25964300001@bivio.com> wrote:
I'n With you, Irene. I had responses from my members and sold the same day. We once bought a MLP by mistake and had to have my accountant do our taxes. Never again.
Thanks to Laurie for the heads up.
Peg Wentworth
Women's Investment Network
On Fri, Aug 2, 2019 at 2:14 PM Irina Clements via bivio.com <user*29448700001@bivio.com> wrote:
As soon as I got Laurie's info email, Celgene became analogous to a REIT or an MLP, which are unsuitable investments for clubs and, as the treasurer I pushed hard for the club's immediate sale.
Typical investments and club life cycle events are challenging enough without adding manual tracking and transactions by the treasurer.
I am relieved.
Irina Clements, Treasurer
Streetbeaters
Best, Irina
On Aug 2, 2019, at 1:13 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
That might help you make a decision, but it will not help you avoid the accounting and valuation issues I described.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
On Fri, Aug 2, 2019 at 12:31 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Thanks Laurie. My opinion was based on discounting the CVRs to zero. That will not be reality but I think that is the better way to analyze a buy or sell decision, especially since the payout is binary (all or nothing).
Peter Dunkelberger
On Fri, Aug 2, 2019 at 12:21 PM Laurie Frederiksen <laurie@bivio.biz> wrote:
This is completely different than a stock you'd receive in a spinoff that represents shares in a company.
This is more like an option or a warrant that has a fixed point in time when it will become worthless unless certain targets are met. Its value will depend on whether or not people who own it feel those targets will be met and how much of a market there is for the rights.
Analyzing whether it will be a good investment for your club will require different skills than analyzing a company. It will probably be thinly traded and more volatile than stock in a regular company, making it that much harder to put a good price on. Daily closing prices may be fairly far off from what your club could get if it decided to sell the CVR's after the fact.
This will add uncertainty to your club accounting for transactions that require a good club valuation such as determining member payouts for a withdrawal. Since you may not have a good price on the value of the rights, you could over or underpay someone. Member units received for contributions may vary more than they might also, affecting your club ownership and tax reporting.
It is obviously up to you to determine how you want to proceed. Our goal is to just raise awareness of the issue while there is still time to avoid it.Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
Virus-free. www.avast.com
We consider that part of the Treasurer job to reconcile the accounts monthly just like you reconcile your own checking account monthly. Account Sync does occasionally missed or misclassify a transaction. It usually failed when there is a complicated stock merger and you will have to asked support for help. I consider that it does 99% of the require work but we still must verified.
I haven't experienced that.BTW our club only buys stocks. They really work hard and are aware of making Treasurer's job as simple as possible. For which I have much gratitude!!Kim PotterBI Brighton Model ClubMichiganSent via the Samsung Galaxy S7, an AT&T 4G LTE smartphone-------- Original message --------From: "Connie Humble via bivio.com" <user*27031200001@bivio.com>Date: 8/6/19 11:30 AM (GMT-05:00)Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?I am wondering if anyone else has trouble, on occasion, with entries not saving in Bivio?
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Irina Clements via bivio.com
Sent: Tuesday, August 6, 2019 7:12 AM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
Speaking as a treasurer who has had people
leave simultaneously, or in quick succession,
pass away, or just depart in a snit, over my tenures
of treasuring [sic], there are multiple ways for
club accounting to get complicated, fast.
Add delays over cooperation with a broker account number
for stock transfers and issues can compound.
Layering complicated stock accounting over that
fabric of people issues unnecessarily complicates things.
My $0.02 on club purpose, but it is education first. Club members
can always buy any investment they wish in their own portfolio, but leave
the MLPs and REITs off the club portfolio.
How much support and coding bandwidth to
devote to such complex issues is a bivio business decision.
Tiered support for those clubs that want more complex
transactions works for my club very well. There is
always an accountant for those clubs so inclined.
Irina Clements
Treasurer, Streetbeaters
On Aug 6, 2019, at 8:42 AM, Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:Qualified and non-qualified dividends and distributions are identified at the time of your brokerage statement, and Bivio can distinguish between those at tax time. So I am not convinced that ETFs should be avoided.
We avoid mutual funds for any number of reasons, primarily because of high cost and low performance.
We had an MLP, and indeed, the tax reporting was a monumental headache. I would avoid it unless your club was convinced that it would make all of its members wealthy and so can afford outside tax preparation.
I still think Celgene will not be the headache that some have projected. If the CVR is trackable , there will be no headache at all. If it is not trackable, I think a club can punt on valuation and put some reasonable number on it without any criticism at all. I will advise our club to make the decision based only on analysis of Bristol Meyers. The CVR is just unknowable.
We have not done bonds, so Linda's comments are well taken.
What bothers me in a lot of this is the tail wagging the dog. The accounting should be the last consideration (though it can be the killer vote) in the consideration of an investment. And limitations of Bivio have been cropping up a lot lately. Is there any thought that perhaps Bivio needs to up its game? I like the Bivio staff and their interaction with their customers is super. But if clubs are limited in the investments because of bookkeeping limitations, perhaps Bivio should consider that.
Peter Dunkelberger
On Tue, Aug 6, 2019 at 4:31 AM Linda Wiltse via bivio.com <user*31518000001@bivio.com> wrote:
Sorry my previous comment was sent before I was finished.
I started to say that ETF's, as well as funds, can have non-qualified dividends, and possibly non-dividend and capital gain distributions. You won't know any of this until February when you get the 1099 from the broker. Then you need to go back and change entries in Bivio to account for various types of income. This can affect the valuation of any withdrawals you processed. Many times the 1099's are corrected at a later date and you can receive it months later, requiring an amended return. Many times the December distributions are not received until later in January, but are taxable for the previous year. That can make doing the Bivio tax return difficult.
Do not invest in Bonds or tax-free bonds. Bonds can have OID, premium acquisition, amortization premiums, accrued interest paid, etc., which can make reporting in Bivio a nightmare. These amounts show on the 1099, but Bivio is not equipped to handle much of this. They cannot handle the percent of treasury bonds from the federal money market fund (where your cash is sitting) so that the state return will show this as a subtraction and put it on the state K-1. Bivio has a lot of limitations when it comes to producing a tax return.
If people want to invest in things other than stocks, they should do it in their own accounts, not in an investment club.
Even bond funds will require some manual adjustments.
If you need to use an outside accountant to prepare the club tax return, it will cost you a lot of money since the return is difficult to produce with the same results as Bivio. All items must be manually entered for each member for their K-1's.
Make life easier and stick to stocks. You can trade options, but they can be difficult to reconcile to the brokerage statement at year end.
Linda Wiltse
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Norm Blizard via bivio.com
Sent: Monday, August 05, 2019 7:43 PM
To: club_cafe@bivio.com
Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?
Could I ask someone in the cafe to publish a simple list of do's and don't (or stay away from) when it comes to investing in ETFs, REITS, Bonds, etc. for an investment club using Bivio accounting? Some of our members want to go beyond stocks.
Thanks
Norm C Blizard
Sr Partner, Senior Center Services Investment Club, Columbus IN
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ROBERT DEIMLING via bivio.com
Sent: Monday, August 5, 2019 1:48 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
No
On Friday, August 2, 2019, 7:41:29 PM EDT, Margaret Wentworth via bivio.com <user*25964300001@bivio.com> wrote:
I'n With you, Irene. I had responses from my members and sold the same day. We once bought a MLP by mistake and had to have my accountant do our taxes. Never again.
Thanks to Laurie for the heads up.
Peg Wentworth
Women's Investment Network
On Fri, Aug 2, 2019 at 2:14 PM Irina Clements via bivio.com <user*29448700001@bivio.com> wrote:
As soon as I got Laurie's info email, Celgene became analogous to a REIT or an MLP, which are unsuitable investments for clubs and, as the treasurer I pushed hard for the club's immediate sale.
Typical investments and club life cycle events are challenging enough without adding manual tracking and transactions by the treasurer.
I am relieved.
Irina Clements, Treasurer
Streetbeaters
Best, Irina
On Aug 2, 2019, at 1:13 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
That might help you make a decision, but it will not help you avoid the accounting and valuation issues I described.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
On Fri, Aug 2, 2019 at 12:31 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Thanks Laurie. My opinion was based on discounting the CVRs to zero. That will not be reality but I think that is the better way to analyze a buy or sell decision, especially since the payout is binary (all or nothing).
Peter Dunkelberger
On Fri, Aug 2, 2019 at 12:21 PM Laurie Frederiksen <laurie@bivio.biz> wrote:
This is completely different than a stock you'd receive in a spinoff that represents shares in a company.
This is more like an option or a warrant that has a fixed point in time when it will become worthless unless certain targets are met. Its value will depend on whether or not people who own it feel those targets will be met and how much of a market there is for the rights.
Analyzing whether it will be a good investment for your club will require different skills than analyzing a company. It will probably be thinly traded and more volatile than stock in a regular company, making it that much harder to put a good price on. Daily closing prices may be fairly far off from what your club could get if it decided to sell the CVR's after the fact.
This will add uncertainty to your club accounting for transactions that require a good club valuation such as determining member payouts for a withdrawal. Since you may not have a good price on the value of the rights, you could over or underpay someone. Member units received for contributions may vary more than they might also, affecting your club ownership and tax reporting.
It is obviously up to you to determine how you want to proceed. Our goal is to just raise awareness of the issue while there is still time to avoid it.Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
Accountsync does not classify qualified vs non-qualified, nor does it handle non-dividend distributions. Those are things that must be done when the tax return is prepared. The transactions can be fixed manually in Bivio once the 1099 is received. Monthly reconciliations will not solve this problem.
Linda WIltse
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Norman Gee via bivio.com
Sent: Tuesday, August 06, 2019 1:16 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
We consider that part of the Treasurer job to reconcile the accounts monthly just like you reconcile your own checking account monthly. Account Sync does occasionally missed or misclassify a transaction. It usually failed when there is a complicated stock merger and you will have to asked support for help. I consider that it does 99% of the require work but we still must verified.
On Tue, Aug 6, 2019 at 10:00 AM byrdshot via bivio.com <user*22890200001@bivio.com> wrote:
I haven't experienced that.
BTW our club only buys stocks. They really work hard and are aware of making Treasurer's job as simple as possible. For which I have much gratitude!!
Kim Potter
BI Brighton Model Club
Michigan
Sent via the Samsung Galaxy S7, an AT&T 4G LTE smartphone
-------- Original message --------
From: "Connie Humble via bivio.com" <user*27031200001@bivio.com>
Date: 8/6/19 11:30 AM (GMT-05:00)
Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?
I am wondering if anyone else has trouble, on occasion, with entries not saving in Bivio?
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Irina Clements via bivio.com
Sent: Tuesday, August 6, 2019 7:12 AM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
Speaking as a treasurer who has had people
leave simultaneously, or in quick succession,
pass away, or just depart in a snit, over my tenures
of treasuring [sic], there are multiple ways for
club accounting to get complicated, fast.
Add delays over cooperation with a broker account number
for stock transfers and issues can compound.
Layering complicated stock accounting over that
fabric of people issues unnecessarily complicates things.
My $0.02 on club purpose, but it is education first. Club members
can always buy any investment they wish in their own portfolio, but leave
the MLPs and REITs off the club portfolio.
How much support and coding bandwidth to
devote to such complex issues is a bivio business decision.
Tiered support for those clubs that want more complex
transactions works for my club very well. There is
always an accountant for those clubs so inclined.
Irina Clements
Treasurer, Streetbeaters
On Aug 6, 2019, at 8:42 AM, Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:Qualified and non-qualified dividends and distributions are identified at the time of your brokerage statement, and Bivio can distinguish between those at tax time. So I am not convinced that ETFs should be avoided.
We avoid mutual funds for any number of reasons, primarily because of high cost and low performance.
We had an MLP, and indeed, the tax reporting was a monumental headache. I would avoid it unless your club was convinced that it would make all of its members wealthy and so can afford outside tax preparation.
I still think Celgene will not be the headache that some have projected. If the CVR is trackable , there will be no headache at all. If it is not trackable, I think a club can punt on valuation and put some reasonable number on it without any criticism at all. I will advise our club to make the decision based only on analysis of Bristol Meyers. The CVR is just unknowable.
We have not done bonds, so Linda's comments are well taken.
What bothers me in a lot of this is the tail wagging the dog. The accounting should be the last consideration (though it can be the killer vote) in the consideration of an investment. And limitations of Bivio have been cropping up a lot lately. Is there any thought that perhaps Bivio needs to up its game? I like the Bivio staff and their interaction with their customers is super. But if clubs are limited in the investments because of bookkeeping limitations, perhaps Bivio should consider that.
Peter Dunkelberger
On Tue, Aug 6, 2019 at 4:31 AM Linda Wiltse via bivio.com <user*31518000001@bivio.com> wrote:
Sorry my previous comment was sent before I was finished.
I started to say that ETF's, as well as funds, can have non-qualified dividends, and possibly non-dividend and capital gain distributions. You won't know any of this until February when you get the 1099 from the broker. Then you need to go back and change entries in Bivio to account for various types of income. This can affect the valuation of any withdrawals you processed. Many times the 1099's are corrected at a later date and you can receive it months later, requiring an amended return. Many times the December distributions are not received until later in January, but are taxable for the previous year. That can make doing the Bivio tax return difficult.
Do not invest in Bonds or tax-free bonds. Bonds can have OID, premium acquisition, amortization premiums, accrued interest paid, etc., which can make reporting in Bivio a nightmare. These amounts show on the 1099, but Bivio is not equipped to handle much of this. They cannot handle the percent of treasury bonds from the federal money market fund (where your cash is sitting) so that the state return will show this as a subtraction and put it on the state K-1. Bivio has a lot of limitations when it comes to producing a tax return.
If people want to invest in things other than stocks, they should do it in their own accounts, not in an investment club.
Even bond funds will require some manual adjustments.
If you need to use an outside accountant to prepare the club tax return, it will cost you a lot of money since the return is difficult to produce with the same results as Bivio. All items must be manually entered for each member for their K-1's.
Make life easier and stick to stocks. You can trade options, but they can be difficult to reconcile to the brokerage statement at year end.
Linda Wiltse
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Norm Blizard via bivio.com
Sent: Monday, August 05, 2019 7:43 PM
To: club_cafe@bivio.com
Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?
Could I ask someone in the cafe to publish a simple list of do's and don't (or stay away from) when it comes to investing in ETFs, REITS, Bonds, etc. for an investment club using Bivio accounting? Some of our members want to go beyond stocks.
Thanks
Norm C Blizard
Sr Partner, Senior Center Services Investment Club, Columbus IN
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ROBERT DEIMLING via bivio.com
Sent: Monday, August 5, 2019 1:48 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
No
On Friday, August 2, 2019, 7:41:29 PM EDT, Margaret Wentworth via bivio.com <user*25964300001@bivio.com> wrote:
I'n With you, Irene. I had responses from my members and sold the same day. We once bought a MLP by mistake and had to have my accountant do our taxes. Never again.
Thanks to Laurie for the heads up.
Peg Wentworth
Women's Investment Network
On Fri, Aug 2, 2019 at 2:14 PM Irina Clements via bivio.com <user*29448700001@bivio.com> wrote:
As soon as I got Laurie's info email, Celgene became analogous to a REIT or an MLP, which are unsuitable investments for clubs and, as the treasurer I pushed hard for the club's immediate sale.
Typical investments and club life cycle events are challenging enough without adding manual tracking and transactions by the treasurer.
I am relieved.
Irina Clements, Treasurer
Streetbeaters
Best, Irina
On Aug 2, 2019, at 1:13 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
That might help you make a decision, but it will not help you avoid the accounting and valuation issues I described.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
On Fri, Aug 2, 2019 at 12:31 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Thanks Laurie. My opinion was based on discounting the CVRs to zero. That will not be reality but I think that is the better way to analyze a buy or sell decision, especially since the payout is binary (all or nothing).
Peter Dunkelberger
On Fri, Aug 2, 2019 at 12:21 PM Laurie Frederiksen <laurie@bivio.biz> wrote:
This is completely different than a stock you'd receive in a spinoff that represents shares in a company.
This is more like an option or a warrant that has a fixed point in time when it will become worthless unless certain targets are met. Its value will depend on whether or not people who own it feel those targets will be met and how much of a market there is for the rights.
Analyzing whether it will be a good investment for your club will require different skills than analyzing a company. It will probably be thinly traded and more volatile than stock in a regular company, making it that much harder to put a good price on. Daily closing prices may be fairly far off from what your club could get if it decided to sell the CVR's after the fact.
This will add uncertainty to your club accounting for transactions that require a good club valuation such as determining member payouts for a withdrawal. Since you may not have a good price on the value of the rights, you could over or underpay someone. Member units received for contributions may vary more than they might also, affecting your club ownership and tax reporting.
It is obviously up to you to determine how you want to proceed. Our goal is to just raise awareness of the issue while there is still time to avoid it.Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
Hopefully your broker identifies non-dividend distributions before transmission to Bivio, as those will affect partnership valuations. Qualified vs. non-qualified dividends don't matter until tax time.
Peter Dunkelberger
Accountsync does not classify qualified vs non-qualified, nor does it handle non-dividend distributions. Those are things that must be done when the tax return is prepared. The transactions can be fixed manually in Bivio once the 1099 is received. Monthly reconciliations will not solve this problem.
Linda WIltse
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Norman Gee via bivio.com
Sent: Tuesday, August 06, 2019 1:16 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
We consider that part of the Treasurer job to reconcile the accounts monthly just like you reconcile your own checking account monthly. Account Sync does occasionally missed or misclassify a transaction. It usually failed when there is a complicated stock merger and you will have to asked support for help. I consider that it does 99% of the require work but we still must verified.
On Tue, Aug 6, 2019 at 10:00 AM byrdshot via bivio.com <user*22890200001@bivio.com> wrote:
I haven't experienced that.
BTW our club only buys stocks. They really work hard and are aware of making Treasurer's job as simple as possible. For which I have much gratitude!!
Kim Potter
BI Brighton Model Club
Michigan
Sent via the Samsung Galaxy S7, an AT&T 4G LTE smartphone
-------- Original message --------
From: "Connie Humble via bivio.com" <user*27031200001@bivio.com>
Date: 8/6/19 11:30 AM (GMT-05:00)
Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?
I am wondering if anyone else has trouble, on occasion, with entries not saving in Bivio?
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Irina Clements via bivio.com
Sent: Tuesday, August 6, 2019 7:12 AM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
Speaking as a treasurer who has had people
leave simultaneously, or in quick succession,
pass away, or just depart in a snit, over my tenures
of treasuring [sic], there are multiple ways for
club accounting to get complicated, fast.
Add delays over cooperation with a broker account number
for stock transfers and issues can compound.
Layering complicated stock accounting over that
fabric of people issues unnecessarily complicates things.
My $0.02 on club purpose, but it is education first. Club members
can always buy any investment they wish in their own portfolio, but leave
the MLPs and REITs off the club portfolio.
How much support and coding bandwidth to
devote to such complex issues is a bivio business decision.
Tiered support for those clubs that want more complex
transactions works for my club very well. There is
always an accountant for those clubs so inclined.
Irina Clements
Treasurer, Streetbeaters
On Aug 6, 2019, at 8:42 AM, Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:Qualified and non-qualified dividends and distributions are identified at the time of your brokerage statement, and Bivio can distinguish between those at tax time. So I am not convinced that ETFs should be avoided.
We avoid mutual funds for any number of reasons, primarily because of high cost and low performance.
We had an MLP, and indeed, the tax reporting was a monumental headache. I would avoid it unless your club was convinced that it would make all of its members wealthy and so can afford outside tax preparation.
I still think Celgene will not be the headache that some have projected. If the CVR is trackable , there will be no headache at all. If it is not trackable, I think a club can punt on valuation and put some reasonable number on it without any criticism at all. I will advise our club to make the decision based only on analysis of Bristol Meyers. The CVR is just unknowable.
We have not done bonds, so Linda's comments are well taken.
What bothers me in a lot of this is the tail wagging the dog. The accounting should be the last consideration (though it can be the killer vote) in the consideration of an investment. And limitations of Bivio have been cropping up a lot lately. Is there any thought that perhaps Bivio needs to up its game? I like the Bivio staff and their interaction with their customers is super. But if clubs are limited in the investments because of bookkeeping limitations, perhaps Bivio should consider that.
Peter Dunkelberger
On Tue, Aug 6, 2019 at 4:31 AM Linda Wiltse via bivio.com <user*31518000001@bivio.com> wrote:
Sorry my previous comment was sent before I was finished.
I started to say that ETF's, as well as funds, can have non-qualified dividends, and possibly non-dividend and capital gain distributions. You won't know any of this until February when you get the 1099 from the broker. Then you need to go back and change entries in Bivio to account for various types of income. This can affect the valuation of any withdrawals you processed. Many times the 1099's are corrected at a later date and you can receive it months later, requiring an amended return. Many times the December distributions are not received until later in January, but are taxable for the previous year. That can make doing the Bivio tax return difficult.
Do not invest in Bonds or tax-free bonds. Bonds can have OID, premium acquisition, amortization premiums, accrued interest paid, etc., which can make reporting in Bivio a nightmare. These amounts show on the 1099, but Bivio is not equipped to handle much of this. They cannot handle the percent of treasury bonds from the federal money market fund (where your cash is sitting) so that the state return will show this as a subtraction and put it on the state K-1. Bivio has a lot of limitations when it comes to producing a tax return.
If people want to invest in things other than stocks, they should do it in their own accounts, not in an investment club.
Even bond funds will require some manual adjustments.
If you need to use an outside accountant to prepare the club tax return, it will cost you a lot of money since the return is difficult to produce with the same results as Bivio. All items must be manually entered for each member for their K-1's.
Make life easier and stick to stocks. You can trade options, but they can be difficult to reconcile to the brokerage statement at year end.
Linda Wiltse
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Norm Blizard via bivio.com
Sent: Monday, August 05, 2019 7:43 PM
To: club_cafe@bivio.com
Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?
Could I ask someone in the cafe to publish a simple list of do's and don't (or stay away from) when it comes to investing in ETFs, REITS, Bonds, etc. for an investment club using Bivio accounting? Some of our members want to go beyond stocks.
Thanks
Norm C Blizard
Sr Partner, Senior Center Services Investment Club, Columbus IN
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ROBERT DEIMLING via bivio.com
Sent: Monday, August 5, 2019 1:48 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
No
On Friday, August 2, 2019, 7:41:29 PM EDT, Margaret Wentworth via bivio.com <user*25964300001@bivio.com> wrote:
I'n With you, Irene. I had responses from my members and sold the same day. We once bought a MLP by mistake and had to have my accountant do our taxes. Never again.
Thanks to Laurie for the heads up.
Peg Wentworth
Women's Investment Network
On Fri, Aug 2, 2019 at 2:14 PM Irina Clements via bivio.com <user*29448700001@bivio.com> wrote:
As soon as I got Laurie's info email, Celgene became analogous to a REIT or an MLP, which are unsuitable investments for clubs and, as the treasurer I pushed hard for the club's immediate sale.
Typical investments and club life cycle events are challenging enough without adding manual tracking and transactions by the treasurer.
I am relieved.
Irina Clements, Treasurer
Streetbeaters
Best, Irina
On Aug 2, 2019, at 1:13 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
That might help you make a decision, but it will not help you avoid the accounting and valuation issues I described.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
On Fri, Aug 2, 2019 at 12:31 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Thanks Laurie. My opinion was based on discounting the CVRs to zero. That will not be reality but I think that is the better way to analyze a buy or sell decision, especially since the payout is binary (all or nothing).
Peter Dunkelberger
On Fri, Aug 2, 2019 at 12:21 PM Laurie Frederiksen <laurie@bivio.biz> wrote:
This is completely different than a stock you'd receive in a spinoff that represents shares in a company.
This is more like an option or a warrant that has a fixed point in time when it will become worthless unless certain targets are met. Its value will depend on whether or not people who own it feel those targets will be met and how much of a market there is for the rights.
Analyzing whether it will be a good investment for your club will require different skills than analyzing a company. It will probably be thinly traded and more volatile than stock in a regular company, making it that much harder to put a good price on. Daily closing prices may be fairly far off from what your club could get if it decided to sell the CVR's after the fact.
This will add uncertainty to your club accounting for transactions that require a good club valuation such as determining member payouts for a withdrawal. Since you may not have a good price on the value of the rights, you could over or underpay someone. Member units received for contributions may vary more than they might also, affecting your club ownership and tax reporting.
It is obviously up to you to determine how you want to proceed. Our goal is to just raise awareness of the issue while there is still time to avoid it.Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
Absolutely - we also do our own audit, usually in Feb. 2 - non-treasurers do that.
Kim
Sent via the Samsung Galaxy S7, an AT&T 4G LTE smartphone
-------- Original message --------
From: "Norman Gee via bivio.com" <user*125100001@bivio.com>
Date: 8/6/19 1:15 PM (GMT-05:00)
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
We consider that part of the Treasurer job to reconcile the accounts monthly just like you reconcile your own checking account monthly. Account Sync does occasionally missed or misclassify a transaction. It usually failed when there is a complicated stock merger and you will have to asked support for help. I consider that it does 99% of the require work but we still must verified.
I haven't experienced that.BTW our club only buys stocks. They really work hard and are aware of making Treasurer's job as simple as possible. For which I have much gratitude!!Kim PotterBI Brighton Model ClubMichiganSent via the Samsung Galaxy S7, an AT&T 4G LTE smartphone-------- Original message --------From: "Connie Humble via bivio.com" <user*27031200001@bivio.com>Date: 8/6/19 11:30 AM (GMT-05:00)Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?I am wondering if anyone else has trouble, on occasion, with entries not saving in Bivio?
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Irina Clements via bivio.com
Sent: Tuesday, August 6, 2019 7:12 AM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
Speaking as a treasurer who has had people
leave simultaneously, or in quick succession,
pass away, or just depart in a snit, over my tenures
of treasuring [sic], there are multiple ways for
club accounting to get complicated, fast.
Add delays over cooperation with a broker account number
for stock transfers and issues can compound.
Layering complicated stock accounting over that
fabric of people issues unnecessarily complicates things.
My $0.02 on club purpose, but it is education first. Club members
can always buy any investment they wish in their own portfolio, but leave
the MLPs and REITs off the club portfolio.
How much support and coding bandwidth to
devote to such complex issues is a bivio business decision.
Tiered support for those clubs that want more complex
transactions works for my club very well. There is
always an accountant for those clubs so inclined.
Irina Clements
Treasurer, Streetbeaters
On Aug 6, 2019, at 8:42 AM, Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:Qualified and non-qualified dividends and distributions are identified at the time of your brokerage statement, and Bivio can distinguish between those at tax time. So I am not convinced that ETFs should be avoided.
We avoid mutual funds for any number of reasons, primarily because of high cost and low performance.
We had an MLP, and indeed, the tax reporting was a monumental headache. I would avoid it unless your club was convinced that it would make all of its members wealthy and so can afford outside tax preparation.
I still think Celgene will not be the headache that some have projected. If the CVR is trackable , there will be no headache at all. If it is not trackable, I think a club can punt on valuation and put some reasonable number on it without any criticism at all. I will advise our club to make the decision based only on analysis of Bristol Meyers. The CVR is just unknowable.
We have not done bonds, so Linda's comments are well taken.
What bothers me in a lot of this is the tail wagging the dog. The accounting should be the last consideration (though it can be the killer vote) in the consideration of an investment. And limitations of Bivio have been cropping up a lot lately. Is there any thought that perhaps Bivio needs to up its game? I like the Bivio staff and their interaction with their customers is super. But if clubs are limited in the investments because of bookkeeping limitations, perhaps Bivio should consider that.
Peter Dunkelberger
On Tue, Aug 6, 2019 at 4:31 AM Linda Wiltse via bivio.com <user*31518000001@bivio.com> wrote:
Sorry my previous comment was sent before I was finished.
I started to say that ETF's, as well as funds, can have non-qualified dividends, and possibly non-dividend and capital gain distributions. You won't know any of this until February when you get the 1099 from the broker. Then you need to go back and change entries in Bivio to account for various types of income. This can affect the valuation of any withdrawals you processed. Many times the 1099's are corrected at a later date and you can receive it months later, requiring an amended return. Many times the December distributions are not received until later in January, but are taxable for the previous year. That can make doing the Bivio tax return difficult.
Do not invest in Bonds or tax-free bonds. Bonds can have OID, premium acquisition, amortization premiums, accrued interest paid, etc., which can make reporting in Bivio a nightmare. These amounts show on the 1099, but Bivio is not equipped to handle much of this. They cannot handle the percent of treasury bonds from the federal money market fund (where your cash is sitting) so that the state return will show this as a subtraction and put it on the state K-1. Bivio has a lot of limitations when it comes to producing a tax return.
If people want to invest in things other than stocks, they should do it in their own accounts, not in an investment club.
Even bond funds will require some manual adjustments.
If you need to use an outside accountant to prepare the club tax return, it will cost you a lot of money since the return is difficult to produce with the same results as Bivio. All items must be manually entered for each member for their K-1's.
Make life easier and stick to stocks. You can trade options, but they can be difficult to reconcile to the brokerage statement at year end.
Linda Wiltse
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Norm Blizard via bivio.com
Sent: Monday, August 05, 2019 7:43 PM
To: club_cafe@bivio.com
Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?
Could I ask someone in the cafe to publish a simple list of do's and don't (or stay away from) when it comes to investing in ETFs, REITS, Bonds, etc. for an investment club using Bivio accounting? Some of our members want to go beyond stocks.
Thanks
Norm C Blizard
Sr Partner, Senior Center Services Investment Club, Columbus IN
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ROBERT DEIMLING via bivio.com
Sent: Monday, August 5, 2019 1:48 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
No
On Friday, August 2, 2019, 7:41:29 PM EDT, Margaret Wentworth via bivio.com <user*25964300001@bivio.com> wrote:
I'n With you, Irene. I had responses from my members and sold the same day. We once bought a MLP by mistake and had to have my accountant do our taxes. Never again.
Thanks to Laurie for the heads up.
Peg Wentworth
Women's Investment Network
On Fri, Aug 2, 2019 at 2:14 PM Irina Clements via bivio.com <user*29448700001@bivio.com> wrote:
As soon as I got Laurie's info email, Celgene became analogous to a REIT or an MLP, which are unsuitable investments for clubs and, as the treasurer I pushed hard for the club's immediate sale.
Typical investments and club life cycle events are challenging enough without adding manual tracking and transactions by the treasurer.
I am relieved.
Irina Clements, Treasurer
Streetbeaters
Best, Irina
On Aug 2, 2019, at 1:13 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
That might help you make a decision, but it will not help you avoid the accounting and valuation issues I described.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
On Fri, Aug 2, 2019 at 12:31 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Thanks Laurie. My opinion was based on discounting the CVRs to zero. That will not be reality but I think that is the better way to analyze a buy or sell decision, especially since the payout is binary (all or nothing).
Peter Dunkelberger
On Fri, Aug 2, 2019 at 12:21 PM Laurie Frederiksen <laurie@bivio.biz> wrote:
This is completely different than a stock you'd receive in a spinoff that represents shares in a company.
This is more like an option or a warrant that has a fixed point in time when it will become worthless unless certain targets are met. Its value will depend on whether or not people who own it feel those targets will be met and how much of a market there is for the rights.
Analyzing whether it will be a good investment for your club will require different skills than analyzing a company. It will probably be thinly traded and more volatile than stock in a regular company, making it that much harder to put a good price on. Daily closing prices may be fairly far off from what your club could get if it decided to sell the CVR's after the fact.
This will add uncertainty to your club accounting for transactions that require a good club valuation such as determining member payouts for a withdrawal. Since you may not have a good price on the value of the rights, you could over or underpay someone. Member units received for contributions may vary more than they might also, affecting your club ownership and tax reporting.
It is obviously up to you to determine how you want to proceed. Our goal is to just raise awareness of the issue while there is still time to avoid it.Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
|
Absolutely - we also do our own audit, usually in Feb. 2 - non-treasurers do that.KimSent via the Samsung Galaxy S7, an AT&T 4G LTE smartphone-------- Original message --------From: "Norman Gee via bivio.com" <user*125100001@bivio.com>Date: 8/6/19 1:15 PM (GMT-05:00)Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?We consider that part of the Treasurer job to reconcile the accounts monthly just like you reconcile your own checking account monthly. Account Sync does occasionally missed or misclassify a transaction. It usually failed when there is a complicated stock merger and you will have to asked support for help. I consider that it does 99% of the require work but we still must verified.I haven't experienced that.BTW our club only buys stocks. They really work hard and are aware of making Treasurer's job as simple as possible. For which I have much gratitude!!Kim PotterBI Brighton Model ClubMichiganSent via the Samsung Galaxy S7, an AT&T 4G LTE smartphone-------- Original message --------From: "Connie Humble via bivio.com" <user*27031200001@bivio.com>Date: 8/6/19 11:30 AM (GMT-05:00)Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?I am wondering if anyone else has trouble, on occasion, with entries not saving in Bivio?
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Irina Clements via bivio.com
Sent: Tuesday, August 6, 2019 7:12 AM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
Speaking as a treasurer who has had people
leave simultaneously, or in quick succession,
pass away, or just depart in a snit, over my tenures
of treasuring [sic], there are multiple ways for
club accounting to get complicated, fast.
Add delays over cooperation with a broker account number
for stock transfers and issues can compound.
Layering complicated stock accounting over that
fabric of people issues unnecessarily complicates things.
My $0.02 on club purpose, but it is education first. Club members
can always buy any investment they wish in their own portfolio, but leave
the MLPs and REITs off the club portfolio.
How much support and coding bandwidth to
devote to such complex issues is a bivio business decision.
Tiered support for those clubs that want more complex
transactions works for my club very well. There is
always an accountant for those clubs so inclined.
Irina Clements
Treasurer, Streetbeaters
On Aug 6, 2019, at 8:42 AM, Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:Qualified and non-qualified dividends and distributions are identified at the time of your brokerage statement, and Bivio can distinguish between those at tax time. So I am not convinced that ETFs should be avoided.
We avoid mutual funds for any number of reasons, primarily because of high cost and low performance.
We had an MLP, and indeed, the tax reporting was a monumental headache. I would avoid it unless your club was convinced that it would make all of its members wealthy and so can afford outside tax preparation.
I still think Celgene will not be the headache that some have projected. If the CVR is trackable , there will be no headache at all. If it is not trackable, I think a club can punt on valuation and put some reasonable number on it without any criticism at all. I will advise our club to make the decision based only on analysis of Bristol Meyers. The CVR is just unknowable.
We have not done bonds, so Linda's comments are well taken.
What bothers me in a lot of this is the tail wagging the dog. The accounting should be the last consideration (though it can be the killer vote) in the consideration of an investment. And limitations of Bivio have been cropping up a lot lately. Is there any thought that perhaps Bivio needs to up its game? I like the Bivio staff and their interaction with their customers is super. But if clubs are limited in the investments because of bookkeeping limitations, perhaps Bivio should consider that.
Peter Dunkelberger
On Tue, Aug 6, 2019 at 4:31 AM Linda Wiltse via bivio.com <user*31518000001@bivio.com> wrote:
Sorry my previous comment was sent before I was finished.
I started to say that ETF's, as well as funds, can have non-qualified dividends, and possibly non-dividend and capital gain distributions. You won't know any of this until February when you get the 1099 from the broker. Then you need to go back and change entries in Bivio to account for various types of income. This can affect the valuation of any withdrawals you processed. Many times the 1099's are corrected at a later date and you can receive it months later, requiring an amended return. Many times the December distributions are not received until later in January, but are taxable for the previous year. That can make doing the Bivio tax return difficult.
Do not invest in Bonds or tax-free bonds. Bonds can have OID, premium acquisition, amortization premiums, accrued interest paid, etc., which can make reporting in Bivio a nightmare. These amounts show on the 1099, but Bivio is not equipped to handle much of this. They cannot handle the percent of treasury bonds from the federal money market fund (where your cash is sitting) so that the state return will show this as a subtraction and put it on the state K-1. Bivio has a lot of limitations when it comes to producing a tax return.
If people want to invest in things other than stocks, they should do it in their own accounts, not in an investment club.
Even bond funds will require some manual adjustments.
If you need to use an outside accountant to prepare the club tax return, it will cost you a lot of money since the return is difficult to produce with the same results as Bivio. All items must be manually entered for each member for their K-1's.
Make life easier and stick to stocks. You can trade options, but they can be difficult to reconcile to the brokerage statement at year end.
Linda Wiltse
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Norm Blizard via bivio.com
Sent: Monday, August 05, 2019 7:43 PM
To: club_cafe@bivio.com
Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?
Could I ask someone in the cafe to publish a simple list of do's and don't (or stay away from) when it comes to investing in ETFs, REITS, Bonds, etc. for an investment club using Bivio accounting? Some of our members want to go beyond stocks.
Thanks
Norm C Blizard
Sr Partner, Senior Center Services Investment Club, Columbus IN
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ROBERT DEIMLING via bivio.com
Sent: Monday, August 5, 2019 1:48 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
No
On Friday, August 2, 2019, 7:41:29 PM EDT, Margaret Wentworth via bivio.com <user*25964300001@bivio.com> wrote:
I'n With you, Irene. I had responses from my members and sold the same day. We once bought a MLP by mistake and had to have my accountant do our taxes. Never again.
Thanks to Laurie for the heads up.
Peg Wentworth
Women's Investment Network
On Fri, Aug 2, 2019 at 2:14 PM Irina Clements via bivio.com <user*29448700001@bivio.com> wrote:
As soon as I got Laurie's info email, Celgene became analogous to a REIT or an MLP, which are unsuitable investments for clubs and, as the treasurer I pushed hard for the club's immediate sale.
Typical investments and club life cycle events are challenging enough without adding manual tracking and transactions by the treasurer.
I am relieved.
Irina Clements, Treasurer
Streetbeaters
Best, Irina
On Aug 2, 2019, at 1:13 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
That might help you make a decision, but it will not help you avoid the accounting and valuation issues I described.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
On Fri, Aug 2, 2019 at 12:31 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Thanks Laurie. My opinion was based on discounting the CVRs to zero. That will not be reality but I think that is the better way to analyze a buy or sell decision, especially since the payout is binary (all or nothing).
Peter Dunkelberger
On Fri, Aug 2, 2019 at 12:21 PM Laurie Frederiksen <laurie@bivio.biz> wrote:
This is completely different than a stock you'd receive in a spinoff that represents shares in a company.
This is more like an option or a warrant that has a fixed point in time when it will become worthless unless certain targets are met. Its value will depend on whether or not people who own it feel those targets will be met and how much of a market there is for the rights.
Analyzing whether it will be a good investment for your club will require different skills than analyzing a company. It will probably be thinly traded and more volatile than stock in a regular company, making it that much harder to put a good price on. Daily closing prices may be fairly far off from what your club could get if it decided to sell the CVR's after the fact.
This will add uncertainty to your club accounting for transactions that require a good club valuation such as determining member payouts for a withdrawal. Since you may not have a good price on the value of the rights, you could over or underpay someone. Member units received for contributions may vary more than they might also, affecting your club ownership and tax reporting.
It is obviously up to you to determine how you want to proceed. Our goal is to just raise awareness of the issue while there is still time to avoid it.Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
Be your pardon, Laurie, you are correct. Non-dividend distributions could be return of capital which reduces the basis in a stock. In that case the basis of the stock is reduced, not the value.
Peter Dunkelberger
On Tue, Aug 6, 2019 at 4:35 PM Laurie Frederiksen <laurie@bivio.biz> wrote:
Just to clarify some misstatements that have been made.
Non- dividend distribution amounts are frequently not known until 1099's are issued since companies have to close their books for the year to determine them.
This statement also applies to qualified/non-qualified breakdowns of some ETF dividends.
They are not picked up by AccountSync and do require manual adjustments on the part of club treasurers before correct taxes can be prepared.
Non-dividend distributions do not affect member valuations any differently than a regular dividend does. They just affect the tax reporting of the distribution.
No single statement can be made regarding accounting problems from ETF's as there are many different kinds. Some can be handled in bivio, some cannot.
bivio provides a very powerful partnership accounting and tax preparation program at a very very low price point. It is designed to handle a specific group of tax reporting issues. It allows you to have an investment club and learn to invest in publicly traded common stock, keep the accounting and do the tax reporting for your club.
Each investment type brings with it its own set of tax reporting issues. It is important that you know what they are and whether they are within the scope of the services provided by bivio before you buy them. We are always glad to answer questions about specific tickers if you send them to support.
When we provide cautions it is because in our experience, many club treasurers do not want to address any manual adjustments, even those that are possible in bivio. We prefer you understand what you are getting into prior to going down a path where you get in over your head.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to UnsubscribeAbsolutely - we also do our own audit, usually in Feb. 2 - non-treasurers do that.KimSent via the Samsung Galaxy S7, an AT&T 4G LTE smartphone-------- Original message --------From: "Norman Gee via bivio.com" <user*125100001@bivio.com>Date: 8/6/19 1:15 PM (GMT-05:00)Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?We consider that part of the Treasurer job to reconcile the accounts monthly just like you reconcile your own checking account monthly. Account Sync does occasionally missed or misclassify a transaction. It usually failed when there is a complicated stock merger and you will have to asked support for help. I consider that it does 99% of the require work but we still must verified.I haven't experienced that.BTW our club only buys stocks. They really work hard and are aware of making Treasurer's job as simple as possible. For which I have much gratitude!!Kim PotterBI Brighton Model ClubMichiganSent via the Samsung Galaxy S7, an AT&T 4G LTE smartphone-------- Original message --------From: "Connie Humble via bivio.com" <user*27031200001@bivio.com>Date: 8/6/19 11:30 AM (GMT-05:00)Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?I am wondering if anyone else has trouble, on occasion, with entries not saving in Bivio?
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Irina Clements via bivio.com
Sent: Tuesday, August 6, 2019 7:12 AM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
Speaking as a treasurer who has had people
leave simultaneously, or in quick succession,
pass away, or just depart in a snit, over my tenures
of treasuring [sic], there are multiple ways for
club accounting to get complicated, fast.
Add delays over cooperation with a broker account number
for stock transfers and issues can compound.
Layering complicated stock accounting over that
fabric of people issues unnecessarily complicates things.
My $0.02 on club purpose, but it is education first. Club members
can always buy any investment they wish in their own portfolio, but leave
the MLPs and REITs off the club portfolio.
How much support and coding bandwidth to
devote to such complex issues is a bivio business decision.
Tiered support for those clubs that want more complex
transactions works for my club very well. There is
always an accountant for those clubs so inclined.
Irina Clements
Treasurer, Streetbeaters
On Aug 6, 2019, at 8:42 AM, Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:Qualified and non-qualified dividends and distributions are identified at the time of your brokerage statement, and Bivio can distinguish between those at tax time. So I am not convinced that ETFs should be avoided.
We avoid mutual funds for any number of reasons, primarily because of high cost and low performance.
We had an MLP, and indeed, the tax reporting was a monumental headache. I would avoid it unless your club was convinced that it would make all of its members wealthy and so can afford outside tax preparation.
I still think Celgene will not be the headache that some have projected. If the CVR is trackable , there will be no headache at all. If it is not trackable, I think a club can punt on valuation and put some reasonable number on it without any criticism at all. I will advise our club to make the decision based only on analysis of Bristol Meyers. The CVR is just unknowable.
We have not done bonds, so Linda's comments are well taken.
What bothers me in a lot of this is the tail wagging the dog. The accounting should be the last consideration (though it can be the killer vote) in the consideration of an investment. And limitations of Bivio have been cropping up a lot lately. Is there any thought that perhaps Bivio needs to up its game? I like the Bivio staff and their interaction with their customers is super. But if clubs are limited in the investments because of bookkeeping limitations, perhaps Bivio should consider that.
Peter Dunkelberger
On Tue, Aug 6, 2019 at 4:31 AM Linda Wiltse via bivio.com <user*31518000001@bivio.com> wrote:
Sorry my previous comment was sent before I was finished.
I started to say that ETF's, as well as funds, can have non-qualified dividends, and possibly non-dividend and capital gain distributions. You won't know any of this until February when you get the 1099 from the broker. Then you need to go back and change entries in Bivio to account for various types of income. This can affect the valuation of any withdrawals you processed. Many times the 1099's are corrected at a later date and you can receive it months later, requiring an amended return. Many times the December distributions are not received until later in January, but are taxable for the previous year. That can make doing the Bivio tax return difficult.
Do not invest in Bonds or tax-free bonds. Bonds can have OID, premium acquisition, amortization premiums, accrued interest paid, etc., which can make reporting in Bivio a nightmare. These amounts show on the 1099, but Bivio is not equipped to handle much of this. They cannot handle the percent of treasury bonds from the federal money market fund (where your cash is sitting) so that the state return will show this as a subtraction and put it on the state K-1. Bivio has a lot of limitations when it comes to producing a tax return.
If people want to invest in things other than stocks, they should do it in their own accounts, not in an investment club.
Even bond funds will require some manual adjustments.
If you need to use an outside accountant to prepare the club tax return, it will cost you a lot of money since the return is difficult to produce with the same results as Bivio. All items must be manually entered for each member for their K-1's.
Make life easier and stick to stocks. You can trade options, but they can be difficult to reconcile to the brokerage statement at year end.
Linda Wiltse
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Norm Blizard via bivio.com
Sent: Monday, August 05, 2019 7:43 PM
To: club_cafe@bivio.com
Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?
Could I ask someone in the cafe to publish a simple list of do's and don't (or stay away from) when it comes to investing in ETFs, REITS, Bonds, etc. for an investment club using Bivio accounting? Some of our members want to go beyond stocks.
Thanks
Norm C Blizard
Sr Partner, Senior Center Services Investment Club, Columbus IN
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ROBERT DEIMLING via bivio.com
Sent: Monday, August 5, 2019 1:48 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
No
On Friday, August 2, 2019, 7:41:29 PM EDT, Margaret Wentworth via bivio.com <user*25964300001@bivio.com> wrote:
I'n With you, Irene. I had responses from my members and sold the same day. We once bought a MLP by mistake and had to have my accountant do our taxes. Never again.
Thanks to Laurie for the heads up.
Peg Wentworth
Women's Investment Network
On Fri, Aug 2, 2019 at 2:14 PM Irina Clements via bivio.com <user*29448700001@bivio.com> wrote:
As soon as I got Laurie's info email, Celgene became analogous to a REIT or an MLP, which are unsuitable investments for clubs and, as the treasurer I pushed hard for the club's immediate sale.
Typical investments and club life cycle events are challenging enough without adding manual tracking and transactions by the treasurer.
I am relieved.
Irina Clements, Treasurer
Streetbeaters
Best, Irina
On Aug 2, 2019, at 1:13 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
That might help you make a decision, but it will not help you avoid the accounting and valuation issues I described.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
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Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
On Fri, Aug 2, 2019 at 12:31 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Thanks Laurie. My opinion was based on discounting the CVRs to zero. That will not be reality but I think that is the better way to analyze a buy or sell decision, especially since the payout is binary (all or nothing).
Peter Dunkelberger
On Fri, Aug 2, 2019 at 12:21 PM Laurie Frederiksen <laurie@bivio.biz> wrote:
This is completely different than a stock you'd receive in a spinoff that represents shares in a company.
This is more like an option or a warrant that has a fixed point in time when it will become worthless unless certain targets are met. Its value will depend on whether or not people who own it feel those targets will be met and how much of a market there is for the rights.
Analyzing whether it will be a good investment for your club will require different skills than analyzing a company. It will probably be thinly traded and more volatile than stock in a regular company, making it that much harder to put a good price on. Daily closing prices may be fairly far off from what your club could get if it decided to sell the CVR's after the fact.
This will add uncertainty to your club accounting for transactions that require a good club valuation such as determining member payouts for a withdrawal. Since you may not have a good price on the value of the rights, you could over or underpay someone. Member units received for contributions may vary more than they might also, affecting your club ownership and tax reporting.
It is obviously up to you to determine how you want to proceed. Our goal is to just raise awareness of the issue while there is still time to avoid it.Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
Thanks to all who contributed their thoughts. Here is what I captured for discussion with my in investment club on August 9. Any corrections, clarifications will be appreciated.
Best regards
Norm Blizard
Sr Partner, SCSIC Columbus IN
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Peter Dunkelberger via bivio.com
Sent: Tuesday, August 6, 2019 8:43 AM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
Qualified and non-qualified dividends and distributions are identified at the time of your brokerage statement, and Bivio can distinguish between those at tax time. So I am not convinced that ETFs should be avoided.
We avoid mutual funds for any number of reasons, primarily because of high cost and low performance.
We had an MLP, and indeed, the tax reporting was a monumental headache. I would avoid it unless your club was convinced that it would make all of its members wealthy and so can afford outside tax preparation.
I still think Celgene will not be the headache that some have projected. If the CVR is trackable , there will be no headache at all. If it is not trackable, I think a club can punt on valuation and put some reasonable number on it without any criticism at all. I will advise our club to make the decision based only on analysis of Bristol Meyers. The CVR is just unknowable.
We have not done bonds, so Linda's comments are well taken.
What bothers me in a lot of this is the tail wagging the dog. The accounting should be the last consideration (though it can be the killer vote) in the consideration of an investment. And limitations of Bivio have been cropping up a lot lately. Is there any thought that perhaps Bivio needs to up its game? I like the Bivio staff and their interaction with their customers is super. But if clubs are limited in the investments because of bookkeeping limitations, perhaps Bivio should consider that.
Peter Dunkelberger
On Tue, Aug 6, 2019 at 4:31 AM Linda Wiltse via bivio.com <user*31518000001@bivio.com> wrote:
Sorry my previous comment was sent before I was finished.
I started to say that ETF's, as well as funds, can have non-qualified dividends, and possibly non-dividend and capital gain distributions. You won't know any of this until February when you get the 1099 from the broker. Then you need to go back and change entries in Bivio to account for various types of income. This can affect the valuation of any withdrawals you processed. Many times the 1099's are corrected at a later date and you can receive it months later, requiring an amended return. Many times the December distributions are not received until later in January, but are taxable for the previous year. That can make doing the Bivio tax return difficult.
Do not invest in Bonds or tax-free bonds. Bonds can have OID, premium acquisition, amortization premiums, accrued interest paid, etc., which can make reporting in Bivio a nightmare. These amounts show on the 1099, but Bivio is not equipped to handle much of this. They cannot handle the percent of treasury bonds from the federal money market fund (where your cash is sitting) so that the state return will show this as a subtraction and put it on the state K-1. Bivio has a lot of limitations when it comes to producing a tax return.
If people want to invest in things other than stocks, they should do it in their own accounts, not in an investment club.
Even bond funds will require some manual adjustments.
If you need to use an outside accountant to prepare the club tax return, it will cost you a lot of money since the return is difficult to produce with the same results as Bivio. All items must be manually entered for each member for their K-1's.
Make life easier and stick to stocks. You can trade options, but they can be difficult to reconcile to the brokerage statement at year end.
Linda Wiltse
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Norm Blizard via bivio.com
Sent: Monday, August 05, 2019 7:43 PM
To: club_cafe@bivio.com
Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?
Could I ask someone in the cafe to publish a simple list of do's and don't (or stay away from) when it comes to investing in ETFs, REITS, Bonds, etc. for an investment club using Bivio accounting? Some of our members want to go beyond stocks.
Thanks
Norm C Blizard
Sr Partner, Senior Center Services Investment Club, Columbus IN
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ROBERT DEIMLING via bivio.com
Sent: Monday, August 5, 2019 1:48 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
No
On Friday, August 2, 2019, 7:41:29 PM EDT, Margaret Wentworth via bivio.com <user*25964300001@bivio.com> wrote:
I'n With you, Irene. I had responses from my members and sold the same day. We once bought a MLP by mistake and had to have my accountant do our taxes. Never again.
Thanks to Laurie for the heads up.
Peg Wentworth
Women's Investment Network
On Fri, Aug 2, 2019 at 2:14 PM Irina Clements via bivio.com <user*29448700001@bivio.com> wrote:
As soon as I got Laurie's info email, Celgene became analogous to a REIT or an MLP, which are unsuitable investments for clubs and, as the treasurer I pushed hard for the club's immediate sale.
Typical investments and club life cycle events are challenging enough without adding manual tracking and transactions by the treasurer.
I am relieved.
Irina Clements, Treasurer
Streetbeaters
Best, Irina
On Aug 2, 2019, at 1:13 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
That might help you make a decision, but it will not help you avoid the accounting and valuation issues I described.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
On Fri, Aug 2, 2019 at 12:31 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Thanks Laurie. My opinion was based on discounting the CVRs to zero. That will not be reality but I think that is the better way to analyze a buy or sell decision, especially since the payout is binary (all or nothing).
Peter Dunkelberger
On Fri, Aug 2, 2019 at 12:21 PM Laurie Frederiksen <laurie@bivio.biz> wrote:
This is completely different than a stock you'd receive in a spinoff that represents shares in a company.
This is more like an option or a warrant that has a fixed point in time when it will become worthless unless certain targets are met. Its value will depend on whether or not people who own it feel those targets will be met and how much of a market there is for the rights.
Analyzing whether it will be a good investment for your club will require different skills than analyzing a company. It will probably be thinly traded and more volatile than stock in a regular company, making it that much harder to put a good price on. Daily closing prices may be fairly far off from what your club could get if it decided to sell the CVR's after the fact.
This will add uncertainty to your club accounting for transactions that require a good club valuation such as determining member payouts for a withdrawal. Since you may not have a good price on the value of the rights, you could over or underpay someone. Member units received for contributions may vary more than they might also, affecting your club ownership and tax reporting.
It is obviously up to you to determine how you want to proceed. Our goal is to just raise awareness of the issue while there is still time to avoid it.Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
Virus-free. www.avast.com
Norm,
My $0.02 on club purpose, but it is education first. Club members
can always buy any investment they wish in their own portfolio, but leave
the MLPs and REITs off the club portfolio.
Best, Irina
Thanks to all who contributed their thoughts. Here is what I captured for discussion with my in investment club on August 9. Any corrections, clarifications will be appreciated.
Best regards
Norm Blizard
Sr Partner, SCSIC Columbus IN
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Peter Dunkelberger via bivio.com
Sent: Tuesday, August 6, 2019 8:43 AM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?Qualified and non-qualified dividends and distributions are identified at the time of your brokerage statement, and Bivio can distinguish between those at tax time. So I am not convinced that ETFs should be avoided.
We avoid mutual funds for any number of reasons, primarily because of high cost and low performance.
We had an MLP, and indeed, the tax reporting was a monumental headache. I would avoid it unless your club was convinced that it would make all of its members wealthy and so can afford outside tax preparation.
I still think Celgene will not be the headache that some have projected. If the CVR is trackable , there will be no headache at all. If it is not trackable, I think a club can punt on valuation and put some reasonable number on it without any criticism at all. I will advise our club to make the decision based only on analysis of Bristol Meyers. The CVR is just unknowable.
We have not done bonds, so Linda's comments are well taken.
What bothers me in a lot of this is the tail wagging the dog. The accounting should be the last consideration (though it can be the killer vote) in the consideration of an investment. And limitations of Bivio have been cropping up a lot lately. Is there any thought that perhaps Bivio needs to up its game? I like the Bivio staff and their interaction with their customers is super. But if clubs are limited in the investments because of bookkeeping limitations, perhaps Bivio should consider that.
Peter Dunkelberger
On Tue, Aug 6, 2019 at 4:31 AM Linda Wiltse via bivio.com <user*31518000001@bivio.com> wrote:
Sorry my previous comment was sent before I was finished.
I started to say that ETF's, as well as funds, can have non-qualified dividends, and possibly non-dividend and capital gain distributions. You won't know any of this until February when you get the 1099 from the broker. Then you need to go back and change entries in Bivio to account for various types of income. This can affect the valuation of any withdrawals you processed. Many times the 1099's are corrected at a later date and you can receive it months later, requiring an amended return. Many times the December distributions are not received until later in January, but are taxable for the previous year. That can make doing the Bivio tax return difficult.
Do not invest in Bonds or tax-free bonds. Bonds can have OID, premium acquisition, amortization premiums, accrued interest paid, etc., which can make reporting in Bivio a nightmare. These amounts show on the 1099, but Bivio is not equipped to handle much of this. They cannot handle the percent of treasury bonds from the federal money market fund (where your cash is sitting) so that the state return will show this as a subtraction and put it on the state K-1. Bivio has a lot of limitations when it comes to producing a tax return.
If people want to invest in things other than stocks, they should do it in their own accounts, not in an investment club.
Even bond funds will require some manual adjustments.
If you need to use an outside accountant to prepare the club tax return, it will cost you a lot of money since the return is difficult to produce with the same results as Bivio. All items must be manually entered for each member for their K-1's.
Make life easier and stick to stocks. You can trade options, but they can be difficult to reconcile to the brokerage statement at year end.
Linda Wiltse
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Norm Blizard via bivio.com
Sent: Monday, August 05, 2019 7:43 PM
To: club_cafe@bivio.com
Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?
Could I ask someone in the cafe to publish a simple list of do's and don't (or stay away from) when it comes to investing in ETFs, REITS, Bonds, etc. for an investment club using Bivio accounting? Some of our members want to go beyond stocks.
Thanks
Norm C Blizard
Sr Partner, Senior Center Services Investment Club, Columbus IN
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ROBERT DEIMLING via bivio.com
Sent: Monday, August 5, 2019 1:48 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
No
On Friday, August 2, 2019, 7:41:29 PM EDT, Margaret Wentworth via bivio.com <user*25964300001@bivio.com> wrote:
I'n With you, Irene. I had responses from my members and sold the same day. We once bought a MLP by mistake and had to have my accountant do our taxes. Never again.
Thanks to Laurie for the heads up.
Peg Wentworth
Women's Investment Network
On Fri, Aug 2, 2019 at 2:14 PM Irina Clements via bivio.com <user*29448700001@bivio.com> wrote:
As soon as I got Laurie's info email, Celgene became analogous to a REIT or an MLP, which are unsuitable investments for clubs and, as the treasurer I pushed hard for the club's immediate sale.
Typical investments and club life cycle events are challenging enough without adding manual tracking and transactions by the treasurer.
I am relieved.
Irina Clements, Treasurer
Streetbeaters
Best, Irina
On Aug 2, 2019, at 1:13 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
That might help you make a decision, but it will not help you avoid the accounting and valuation issues I described.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
On Fri, Aug 2, 2019 at 12:31 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Thanks Laurie. My opinion was based on discounting the CVRs to zero. That will not be reality but I think that is the better way to analyze a buy or sell decision, especially since the payout is binary (all or nothing).
Peter Dunkelberger
On Fri, Aug 2, 2019 at 12:21 PM Laurie Frederiksen <laurie@bivio.biz> wrote:
This is completely different than a stock you'd receive in a spinoff that represents shares in a company.
This is more like an option or a warrant that has a fixed point in time when it will become worthless unless certain targets are met. Its value will depend on whether or not people who own it feel those targets will be met and how much of a market there is for the rights.
Analyzing whether it will be a good investment for your club will require different skills than analyzing a company. It will probably be thinly traded and more volatile than stock in a regular company, making it that much harder to put a good price on. Daily closing prices may be fairly far off from what your club could get if it decided to sell the CVR's after the fact.
This will add uncertainty to your club accounting for transactions that require a good club valuation such as determining member payouts for a withdrawal. Since you may not have a good price on the value of the rights, you could over or underpay someone. Member units received for contributions may vary more than they might also, affecting your club ownership and tax reporting.
It is obviously up to you to determine how you want to proceed. Our goal is to just raise awareness of the issue while there is still time to avoid it.Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
Virus-free. www.avast.com
<accounting considerations for SCSIC in bivio.pdf>
Norm, good summary.
I would suggest a small correction for the comment on Celgene. I don't believe that Celgene is analogous to an MLP or REIT. Just for background, Celgene is a company that issued common stock, stuff in which every club invests. Celgene was bought by Bristol Meyers, another company with common stock. Bristol Meyers bought Celgene. Owners of Celgene get three forms of compensation: $50 in cash (simple bookkeeping), a share of BMY (Bristol Meyers) common stock (also simple bookkeeping) and a "CVR" (I think that is an abbreviation for contingent value rights) which is worth up to $9 if a specified list of three drugs get FDA approval. If any one or all of the drugs fail to get approval, the CVR is worthless. The question with the CVRs is how to value them.
So, the only complication is how to value the CVR on your books. According to Form S-4 filed with the SEC by Bristol in February of this year, "...The CVRs are separate from Celgene shares and are expected to be publicly traded on the NYSE. The stock market will value the CVR once it starts trading..." and "...Bristol-Myers Squibb has agreed to use reasonable best efforts to cause the CVRs to be approved for listing on the NYSE or other
national securities exchange and maintain such listing for as long as the CVRs remain outstanding..."
So there does not seem to be any major problem with valuation. In my humble opinion, the bookkeeping for the merger should not stop your club from analyzing the future of BMY and deciding if it is a worthwhile investment. Where as an MLP or REIT could be a great investment, but not for an investment club with limited accounting and tax preparation resources.
Peter Dunkelberger
Thanks to all who contributed their thoughts. Here is what I captured for discussion with my in investment club on August 9. Any corrections, clarifications will be appreciated.
Best regards
Norm Blizard
Sr Partner, SCSIC Columbus IN
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Peter Dunkelberger via bivio.com
Sent: Tuesday, August 6, 2019 8:43 AM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
Qualified and non-qualified dividends and distributions are identified at the time of your brokerage statement, and Bivio can distinguish between those at tax time. So I am not convinced that ETFs should be avoided.
We avoid mutual funds for any number of reasons, primarily because of high cost and low performance.
We had an MLP, and indeed, the tax reporting was a monumental headache. I would avoid it unless your club was convinced that it would make all of its members wealthy and so can afford outside tax preparation.
I still think Celgene will not be the headache that some have projected. If the CVR is trackable , there will be no headache at all. If it is not trackable, I think a club can punt on valuation and put some reasonable number on it without any criticism at all. I will advise our club to make the decision based only on analysis of Bristol Meyers. The CVR is just unknowable.
We have not done bonds, so Linda's comments are well taken.
What bothers me in a lot of this is the tail wagging the dog. The accounting should be the last consideration (though it can be the killer vote) in the consideration of an investment. And limitations of Bivio have been cropping up a lot lately. Is there any thought that perhaps Bivio needs to up its game? I like the Bivio staff and their interaction with their customers is super. But if clubs are limited in the investments because of bookkeeping limitations, perhaps Bivio should consider that.
Peter Dunkelberger
On Tue, Aug 6, 2019 at 4:31 AM Linda Wiltse via bivio.com <user*31518000001@bivio.com> wrote:
Sorry my previous comment was sent before I was finished.
I started to say that ETF's, as well as funds, can have non-qualified dividends, and possibly non-dividend and capital gain distributions. You won't know any of this until February when you get the 1099 from the broker. Then you need to go back and change entries in Bivio to account for various types of income. This can affect the valuation of any withdrawals you processed. Many times the 1099's are corrected at a later date and you can receive it months later, requiring an amended return. Many times the December distributions are not received until later in January, but are taxable for the previous year. That can make doing the Bivio tax return difficult.
Do not invest in Bonds or tax-free bonds. Bonds can have OID, premium acquisition, amortization premiums, accrued interest paid, etc., which can make reporting in Bivio a nightmare. These amounts show on the 1099, but Bivio is not equipped to handle much of this. They cannot handle the percent of treasury bonds from the federal money market fund (where your cash is sitting) so that the state return will show this as a subtraction and put it on the state K-1. Bivio has a lot of limitations when it comes to producing a tax return.
If people want to invest in things other than stocks, they should do it in their own accounts, not in an investment club.
Even bond funds will require some manual adjustments.
If you need to use an outside accountant to prepare the club tax return, it will cost you a lot of money since the return is difficult to produce with the same results as Bivio. All items must be manually entered for each member for their K-1's.
Make life easier and stick to stocks. You can trade options, but they can be difficult to reconcile to the brokerage statement at year end.
Linda Wiltse
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Norm Blizard via bivio.com
Sent: Monday, August 05, 2019 7:43 PM
To: club_cafe@bivio.com
Subject: RE: [club_cafe] Re: Does Your Club Own Celgene?
Could I ask someone in the cafe to publish a simple list of do's and don't (or stay away from) when it comes to investing in ETFs, REITS, Bonds, etc. for an investment club using Bivio accounting? Some of our members want to go beyond stocks.
Thanks
Norm C Blizard
Sr Partner, Senior Center Services Investment Club, Columbus IN
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ROBERT DEIMLING via bivio.com
Sent: Monday, August 5, 2019 1:48 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Re: Does Your Club Own Celgene?
No
On Friday, August 2, 2019, 7:41:29 PM EDT, Margaret Wentworth via bivio.com <user*25964300001@bivio.com> wrote:
I'n With you, Irene. I had responses from my members and sold the same day. We once bought a MLP by mistake and had to have my accountant do our taxes. Never again.
Thanks to Laurie for the heads up.
Peg Wentworth
Women's Investment Network
On Fri, Aug 2, 2019 at 2:14 PM Irina Clements via bivio.com <user*29448700001@bivio.com> wrote:
As soon as I got Laurie's info email, Celgene became analogous to a REIT or an MLP, which are unsuitable investments for clubs and, as the treasurer I pushed hard for the club's immediate sale.
Typical investments and club life cycle events are challenging enough without adding manual tracking and transactions by the treasurer.
I am relieved.
Irina Clements, Treasurer
Streetbeaters
Best, Irina
On Aug 2, 2019, at 1:13 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
That might help you make a decision, but it will not help you avoid the accounting and valuation issues I described.
Laurie Frederiksen
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On Fri, Aug 2, 2019 at 12:31 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Thanks Laurie. My opinion was based on discounting the CVRs to zero. That will not be reality but I think that is the better way to analyze a buy or sell decision, especially since the payout is binary (all or nothing).
Peter Dunkelberger
On Fri, Aug 2, 2019 at 12:21 PM Laurie Frederiksen <laurie@bivio.biz> wrote:
This is completely different than a stock you'd receive in a spinoff that represents shares in a company.
This is more like an option or a warrant that has a fixed point in time when it will become worthless unless certain targets are met. Its value will depend on whether or not people who own it feel those targets will be met and how much of a market there is for the rights.
Analyzing whether it will be a good investment for your club will require different skills than analyzing a company. It will probably be thinly traded and more volatile than stock in a regular company, making it that much harder to put a good price on. Daily closing prices may be fairly far off from what your club could get if it decided to sell the CVR's after the fact.
This will add uncertainty to your club accounting for transactions that require a good club valuation such as determining member payouts for a withdrawal. Since you may not have a good price on the value of the rights, you could over or underpay someone. Member units received for contributions may vary more than they might also, affecting your club ownership and tax reporting.
It is obviously up to you to determine how you want to proceed. Our goal is to just raise awareness of the issue while there is still time to avoid it.Laurie Frederiksen
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