Communications
club_cafe
HelpRegister
Unfair taxation of mutual fund investor (and IC)?
Read about unfair taxation in mutual funds.
This can very well happen to Investment club also when some member withdraw money. Club as collective efforts is very similar to MF.

http://online.wsj.com/news/articles/SB10001424052702303393804579311062915642246

http://www.marketwatch.com/story/tax-law-is-unfair-to-mutual-fund-investors-2010-03-28
Read the attachment and it should clear up your misconception. 

John


On Thursday, May 29, 2014 4:53 PM, Raka maka <rakamaka@inbox.com> wrote:


Read about unfair taxation in mutual funds.
This can very well happen to Investment club also when some member withdraw money. Club as collective efforts is very similar to MF.

http://online.wsj.com/news/articles/SB10001424052702303393804579311062915642246

http://www.marketwatch.com/story/tax-law-is-unfair-to-mutual-fund-investors-2010-03-28


Hi,

This is not the same thing as partnership taxation.

When you realize a gain or loss by selling a stock in your club, the tax consequences are passed through to each member in the year of the sale and they pay taxes on it on their personal taxes.

However, unlike a mutual fund, that taxable amount also affects your tax basis in the club and does not impact the number of units you own. That ultimately affects your gain or loss on your investment in the club when you finally withdraw funds. This is different than the example in the article where a realized gain is actually distributed to members and then used to purchase additional shares of the fund.

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 Thu, May 29, 2014 at 7:53 PM, Raka maka <> wrote:
Read about unfair taxation in mutual funds.
This can very well happen to Investment club also when some member withdraw money. Club as collective efforts is very similar to MF.

http://online.wsj.com/news/articles/SB10001424052702303393804579311062915642246

http://www.marketwatch.com/story/tax-law-is-unfair-to-mutual-fund-investors-2010-03-28