Hi Zak,

What you are proposing is acceptable under IRS regulations. The ‘holding period’ of each security so transferred would start with the date that the particular member acquired the security. Unfortunately, although the transfer is permitted under IRS regulations, no existing software is capable of performing the complex computations that accompany such a transaction. The software would have to keep track of each security so transferred, and allocate the gain on its sale between the individual member making the transfer and the club. To clarify, any locked-in gain at the time of transfer would be allocated to the individual investor at the time of a subsequent sale, and any additional gain would be allocated to the club.

The record keeping would be extremely complicated, and, as I said, no software of which I am aware, is capable of doing this.

Rip West

Saint Paul, MN