IRS Summertime Tax Tip 2013-10: How to Get a Transcript or Copy of a Prior Year Tax Return

Laurie Frederiksen on

We would recommend that you keep a paper or PDF copy of the actual tax returns you file for your club each year.

If you never change any data in bivio, you would always be able to re-generate them. However, we run into situations where either a clubs records from the past were incorrect or a club changes a historical transaction by mistake. If you find you need to make a change in past year data, it may mean all the tax returns you've filed since the point of the correction were incorrect. Depending on the magnitude or type of change your club may need to file amended returns and each of your members may need to file amended personal returns.

Once you make corrections, you need something to compare to to determine how big of an impact there was on the taxes you already filed.

That is when it is important to have saved a hard copy (or PDF) of what you actually did file.

If you haven't kept a hard copy of your filed return, here is a bulletin from the IRS that describes how you would go about getting one. You may only need a transcript. They are free and summarize the numbers that were on your return. If that isn't enough, there is a charge for getting a full copy of your return.

How To Get a Copy of A Prior Year Tax Return

You can avoid having this problem by following all the record verification steps we spell out in our instructions about how to prepare your club taxes.

After all, it's nice of the IRS to send out these Summertime Tax Tips, but who wants to be worrying about taxes right now. :)

Laurie Frederiksen
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Ann Dexheimer on

Hiya, Carol.

I read this and figure it is a good idea for our club to keep a .pdf of our tax returns. Have you "printed" one out? Let me know if you need me to do it.

On Wed, Jul 24, 2013 at 7:26 AM, Laurie Frederiksen <laurie@bivio.biz> wrote:

We would recommend that you keep a paper or PDF copy of the actual tax returns you file for your club each year.

If you never change any data in bivio, you would always be able to re-generate them. However, we run into situations where either a clubs records from the past were incorrect or a club changes a historical transaction by mistake. If you find you need to make a change in past year data, it may mean all the tax returns you've filed since the point of the correction were incorrect. Depending on the magnitude or type of change your club may need to file amended returns and each of your members may need to file amended personal returns.

Once you make corrections, you need something to compare to to determine how big of an impact there was on the taxes you already filed.

That is when it is important to have saved a hard copy (or PDF) of what you actually did file.

If you haven't kept a hard copy of your filed return, here is a bulletin from the IRS that describes how you would go about getting one. You may only need a transcript. They are free and summarize the numbers that were on your return. If that isn't enough, there is a charge for getting a full copy of your return.

How To Get a Copy of A Prior Year Tax Return

You can avoid having this problem by following all the record verification steps we spell out in our instructions about how to prepare your club taxes.

After all, it's nice of the IRS to send out these Summertime Tax Tips, but who wants to be worrying about taxes right now. :)

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

Laurie Frederiksen on

Dear John,

The members gain on his investment in the club would never be divided up between the other partners.

You may be confusing that with the gain on the stock. That is a different question. The member will be taxed on his portion of the increase in value of that stock in all cases. There are just differences in how it will be reported to him and when he has to report it on his personal taxes. There are 3 scenarios:

1. If the stock is sold prior to the member withdrawal transaction date, the member share of the gain will be allocated to him and his portion of the gain on the stock sale will show up on his K-1 and he will pay taxes on it there, this year.

It will also increase his tax basis in the club, lowering the gain on withdrawal amount he will owe taxes on.

Club members will owe taxes on their portion of the gain.

2. If the stock is sold after the withdrawal transaction date, the members tax basis in the club will not change because he will not have participated in the realization of the gain, so he will have a bigger gain on withdrawal to pay taxes on.

In either case, assuming the stock gain is long term, he'll pay the same amount of taxes at the same time. It will just be reported to him in different places.

Club members will actually be paying taxes on a larger portion of the gain since it won't be being allocated to the withdrawn member in the same way. This will increase their tax basis in the club in the same amount so they will ultimately pay less gains when they withdraw.

3. If, however, you transferred the appreciated stock to him (and no cash), he can defer recognizing (being taxed on), his gain on withdrawal until he sells the shares of stock. Club members would also not owe taxes on the gain this year.

That's why we say that transferring appreciated stock is advised in a full withdrawal.

On Fri, Nov 8, 2013 at 12:40 PM, John Rice <rice.j1969@att.net> wrote:

Hello,

We have a member who is doing a full withdrawal. His tax base is $1,446.40, market value is $2,262.90 and his amount is 3.4% of the club. We also have a stock that looks like it will sell due to a stop loss and the amount will more than cover what the partner will get. The withdrawing partner will cash sell any stocks we transfer to him immediately. If the club decides to give him the cash instead would his capital gains ($2,262.90 - 1,446.40 = 816.50) be divided up between the remainder partners? We will have 17 partners left with % ranging from 0.1% - 12.3%. So the partner with the biggest % will see an increase of about $80 in his basis and will pay the tax this year. Since the withdrawing partner is selling the stock immediately is doesn't matter to him which was we go because his taxes will be the same. Am I correct in the outcome?

John Rice
ABODI Investment Club

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