Capital Gains and Tax Implications
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Capital Gains and Tax Implications We have a dwindling club membership with serveral recent withdrawals and are contemplating ending our club. We also have a very large amount of non realized capital gains. If we were to disolve the club; would the last remaining members be responsible for large capital gains on the equity sales to liquidate? Or, is there an accounting work around? It does not seem fair if the last remaining members get huge tax bill upon liquidation. It will all work out correctly when you withdraw each member. Bivio takes everything in consideration when it calculates the withdraws. Someone else can give you the technical explanation but look at the capital gains per each member not the capital gains of the club. No one gets screwed. John On Wednesday, October 22, 2014 9:06 AM, Joel Olander via bivio.com <user*4343600001@bivio.com> wrote: We have a dwindling club membership with serveral recent withdrawals and are contemplating ending our club. We also have a very large amount of non realized capital gains. If we were to disolve the club; would the last remaining members be responsible for large capital gains on the equity sales to liquidate? Or, is there an accounting work around? It does not seem fair if the last remaining members get huge tax bill upon liquidation. If you transfer appreciated stock and do not liquidate it before disbanding, I believe individuals delay the capital gain until they finally do sell. That provides the ability to spread the gain over as many years as you continue to hold the stock. Mike Jones Wall$treet Wannabees Bloomington, MN From: John Rice <rice.j1969@att.net> To: "club_cafe@bivio.com" <club_cafe@bivio.com> Sent: Wednesday, October 22, 2014 11:53 AM Subject: Re: [club_cafe] Capital Gains and Tax Implications It will all work out correctly when you withdraw each member. Bivio takes everything in consideration when it calculates the withdraws. Someone else can give you the technical explanation but look at the capital gains per each member not the capital gains of the club. No one gets screwed. John On Wednesday, October 22, 2014 9:06 AM, Joel Olander via bivio.com <user*4343600001@bivio.com> wrote: We have a dwindling club membership with serveral recent withdrawals and are contemplating ending our club. We also have a very large amount of non realized capital gains. If we were to disolve the club; would the last remaining members be responsible for large capital gains on the equity sales to liquidate? Or, is there an accounting work around? It does not seem fair if the last remaining members get huge tax bill upon liquidation.
Ok, so in essence it's like a mutual fund that liquidates. The negative issue is that we have some members who have recently joined; yet they would have pay long term capital gains on stocks that have appreciated since we purchased them (some over 15yrs ago). Is this correct? Hi Joel, No, it doesn't work that way. It's true that if you sell the stocks the recent members will be picking up gains that may have occurred well before they became members, but those gains will be added to their basis, and then they will show an offsetting loss when the club pays them off. The best way to look at it is to review the member status report. If the stocks are sold for the values reflected in that report, each member's gain will be as shown on the report. Rip West -----Original Message----- From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Joel Olander via bivio.com Sent: Wednesday, October 22, 2014 5:24 PM To: club_cafe@bivio.com Subject: [club_cafe] Re: Capital Gains and Tax Implications Ok, so in essence it's like a mutual fund that liquidates. The negative issue is that we have some members who have recently joined; yet they would have pay long term capital gains on stocks that have appreciated since we purchased them (some over 15yrs ago). Is this correct?
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