Transferring a stock with a gain
To payout a withdrawing partner we plan to transfer a stock
in which the club has a substantial gain. I understand that
by doing this the club avoids having to pay a Capital Gains
tax on the gain. Can the Club then turn around and buy the
stock again, or must we wait 31 days to avoid a Wash sale
rule?
in which the club has a substantial gain. I understand that
by doing this the club avoids having to pay a Capital Gains
tax on the gain. Can the Club then turn around and buy the
stock again, or must we wait 31 days to avoid a Wash sale
rule?
|
On Thu, Feb 9, 2017 at 10:29 AM, Leonard Gilman Declar.of Trust 7/9/03 <lengee55@gmail.com> wrote:
To payout a withdrawing partner we plan to transfer a stock
in which the club has a substantial gain. I understand that
by doing this the club avoids having to pay a Capital Gains
tax on the gain. Can the Club then turn around and buy the
stock again, or must we wait 31 days to avoid a Wash sale
rule?
The withdrawing Partner will be given stock in which the
club has a substantial gain. What will be his cost basis in
the stock we have transferred to his brokerage account?
club has a substantial gain. What will be his cost basis in
the stock we have transferred to his brokerage account?
|
On Thu, Feb 9, 2017 at 11:12 AM, Leonard Gilman Declar.of Trust 7/9/03 <lengee55@gmail.com> wrote:
The withdrawing Partner will be given stock in which the
club has a substantial gain. What will be his cost basis in
the stock we have transferred to his brokerage account?
But the partner will probably have to track this adjusted basis personally. Our experience, particularly with TD AMERITRADE is that the broker will simply move their value for the club basis in the security to be the partner's basis in their record keeping. They will will not "adjust the basis" for the partner. Upon his sale of security he will need to account for difference in his personal return to properly report the adjusted basis.
Laurie and I had this discussion a year or so ago. Has to do with rules investment brokers must follow for transfers.
Sent from my iPhone
Sent from my iPhone
Curtis Meaux, CPA, CGMA
His cost basis in the shares of stock will be his tax basis in the club minus any cash amount you also give him. It will be shown on his withdrawal report.
If you want to see for yourself, it would be fine to enter the withdrawal as you are considering it and see for yourself. You could then delete it and re-enter it when you are actually ready to make the transfer.
Here is an example of a cash plus stock withdrawal:
https://www.bivio.com/demo_club/file/Public/Transferring_Stock_To_Pay_A_Withdrawal.html
There are many moving parts to such a transaction. Make sure that you have everything correct before you actually give him any stock. Such a withdrawal payout is difficult if not impossible to "correct" after the fact.
Laurie Frederiksen
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Click here to Subscribe to the Club Cafe email list. Click here to UnsubscribeOn Thu, Feb 9, 2017 at 11:12 AM, Leonard Gilman Declar.of Trust 7/9/03 <lengee55@gmail.com> wrote:The withdrawing Partner will be given stock in which the
club has a substantial gain. What will be his cost basis in
the stock we have transferred to his brokerage account?
|
On Thu, Feb 9, 2017 at 12:53 PM, Curtis Meaux <cpmeaux51@att.net> wrote:
But the partner will probably have to track this adjusted basis personally. Our experience, particularly with TD AMERITRADE is that the broker will simply move their value for the club basis in the security to be the partner's basis in their record keeping. They will will not "adjust the basis" for the partner. Upon his sale of security he will need to account for difference in his personal return to properly report the adjusted basis.Laurie and I had this discussion a year or so ago. Has to do with rules investment brokers must follow for transfers.
Sent from my iPhoneCurtis Meaux, CPA, CGMA
His cost basis in the shares of stock will be his tax basis in the club minus any cash amount you also give him. It will be shown on his withdrawal report.
If you want to see for yourself, it would be fine to enter the withdrawal as you are considering it and see for yourself. You could then delete it and re-enter it when you are actually ready to make the transfer.
Here is an example of a cash plus stock withdrawal:
There are many moving parts to such a transaction. Make sure that you have everything correct before you actually give him any stock. Such a withdrawal payout is difficult if not impossible to "correct" after the fact.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivi
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to UnsubscribeOn Thu, Feb 9, 2017 at 11:12 AM, Leonard Gilman Declar.of Trust 7/9/03 <lengee55@gmail.com> wrote:The withdrawing Partner will be given stock in which the
club has a substantial gain. What will be his cost basis in
the stock we have transferred to his brokerage account?
Laurie, just did first transfer JNJ after celebrating our 20th year to a withdrawing member, others have always taken cash. We have Apple at $14 and are saving for future transfer thinking it will save tax for all members. Your post seems this will not prevent taxes to club or member?
On Feb 9, 2017 10:56 AM, "Laurie Frederiksen" <laurie@bivio.biz> wrote:
Hi,
Transferring stock in which your club has a gain to fund a withdrawal is a good plan. Just to clarify though, it doesn't mean you avoid paying taxes on the capital gains you have in the stock, it just means your taxes on those gains will be delayed until you withdraw from the club yourselves.
Delaying paying taxes is usually considered desirable.
If you are transferring stocks in which you have a gain, you do not need to worry about wash sale rules. It would be fine to buy shares back again the day after you make the transfer if you want.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivi
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to UnsubscribeOn Thu, Feb 9, 2017 at 10:29 AM, Leonard Gilman Declar.of Trust 7/9/03 <lengee55@gmail.com> wrote:To payout a withdrawing partner we plan to transfer a stock
in which the club has a substantial gain. I understand that
by doing this the club avoids having to pay a Capital Gains
tax on the gain. Can the Club then turn around and buy the
stock again, or must we wait 31 days to avoid a Wash sale
rule?
|
On Thu, Feb 9, 2017 at 6:08 PM, cindy gerke <cgerke0@gmail.com> wrote:
Laurie, just did first transfer JNJ after celebrating our 20th year to a withdrawing member, others have always taken cash. We have Apple at $14 and are saving for future transfer thinking it will save tax for all members. Your post seems this will not prevent taxes to club or member?On Feb 9, 2017 10:56 AM, "Laurie Frederiksen" <laurie@bivio.biz> wrote:
Hi,
Transferring stock in which your club has a gain to fund a withdrawal is a good plan. Just to clarify though, it doesn't mean you avoid paying taxes on the capital gains you have in the stock, it just means your taxes on those gains will be delayed until you withdraw from the club yourselves.
Delaying paying taxes is usually considered desirable.
If you are transferring stocks in which you have a gain, you do not need to worry about wash sale rules. It would be fine to buy shares back again the day after you make the transfer if you want.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivi
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to UnsubscribeOn Thu, Feb 9, 2017 at 10:29 AM, Leonard Gilman Declar.of Trust 7/9/03 <lengee55@gmail.com> wrote:To payout a withdrawing partner we plan to transfer a stock
in which the club has a substantial gain. I understand that
by doing this the club avoids having to pay a Capital Gains
tax on the gain. Can the Club then turn around and buy the
stock again, or must we wait 31 days to avoid a Wash sale
rule?
If you want to avoid paying taxes, die. (Not that I'm wishing that outcome for anyone.)
Ira Smilovitz
On Thu, Feb 9, 2017 at 6:36 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Sorry. Not that good. Transferring appreciated stock does not prevent payment of taxes it just delays when they are due.
The member will pay them when they sell the shares they receive. The rest of the club will pay them when they withdraw from the club.
That is why deferring the payment of taxes is, in general, desirable due to the time value of money.
There aren't a lot of ways to avoid paying taxes as we all know.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivi
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to UnsubscribeOn Thu, Feb 9, 2017 at 6:08 PM, cindy gerke <cgerke0@gmail.com> wrote:Laurie, just did first transfer JNJ after celebrating our 20th year to a withdrawing member, others have always taken cash. We have Apple at $14 and are saving for future transfer thinking it will save tax for all members. Your post seems this will not prevent taxes to club or member?On Feb 9, 2017 10:56 AM, "Laurie Frederiksen" <laurie@bivio.biz> wrote:
Hi,
Transferring stock in which your club has a gain to fund a withdrawal is a good plan. Just to clarify though, it doesn't mean you avoid paying taxes on the capital gains you have in the stock, it just means your taxes on those gains will be delayed until you withdraw from the club yourselves.
Delaying paying taxes is usually considered desirable.
If you are transferring stocks in which you have a gain, you do not need to worry about wash sale rules. It would be fine to buy shares back again the day after you make the transfer if you want.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivi
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to UnsubscribeOn Thu, Feb 9, 2017 at 10:29 AM, Leonard Gilman Declar.of Trust 7/9/03 <lengee55@gmail.com> wrote:To payout a withdrawing partner we plan to transfer a stock
in which the club has a substantial gain. I understand that
by doing this the club avoids having to pay a Capital Gains
tax on the gain. Can the Club then turn around and buy the
stock again, or must we wait 31 days to avoid a Wash sale
rule?
Inherited stock will pass through to the heirs at a stepped up basis.
Linda
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of ira smilovitz
Sent: Thursday, February 09, 2017 8:38 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Transferring a stock with a gain
If you want to avoid paying taxes, die. (Not that I'm wishing that outcome for anyone.)
Ira Smilovitz
On Thu, Feb 9, 2017 at 6:36 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
|
On Thu, Feb 9, 2017 at 6:08 PM, cindy gerke <cgerke0@gmail.com> wrote:
Laurie, just did first transfer JNJ after celebrating our 20th year to a withdrawing member, others have always taken cash. We have Apple at $14 and are saving for future transfer thinking it will save tax for all members. Your post seems this will not prevent taxes to club or member?
On Feb 9, 2017 10:56 AM, "Laurie Frederiksen" <laurie@bivio.biz> wrote:
|
On Thu, Feb 9, 2017 at 10:29 AM, Leonard Gilman Declar.of Trust 7/9/03 <lengee55@gmail.com> wrote:
To payout a withdrawing partner we plan to transfer a stock
in which the club has a substantial gain. I understand that
by doing this the club avoids having to pay a Capital Gains
tax on the gain. Can the Club then turn around and buy the
stock again, or must we wait 31 days to avoid a Wash sale
rule?
|
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|
That was my unstated point.
Ira Smilovitz
On Fri, Feb 10, 2017 at 12:08 AM, Linda Wiltse <wiltse@optonline.net> wrote:
Inherited stock will pass through to the heirs at a stepped up basis.
Linda
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of ira smilovitz
Sent: Thursday, February 09, 2017 8:38 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Transferring a stock with a gain
If you want to avoid paying taxes, die. (Not that I'm wishing that outcome for anyone.)
Ira Smilovitz
On Thu, Feb 9, 2017 at 6:36 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Sorry. Not that good. Transferring appreciated stock does not prevent payment of taxes it just delays when they are due.
The member will pay them when they sell the shares they receive. The rest of the club will pay them when they withdraw from the club.
That is why deferring the payment of taxes is, in general, desirable due to the time value of money.
There aren't a lot of ways to avoid paying taxes as we all know.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
On Thu, Feb 9, 2017 at 6:08 PM, cindy gerke <cgerke0@gmail.com> wrote:
Laurie, just did first transfer JNJ after celebrating our 20th year to a withdrawing member, others have always taken cash. We have Apple at $14 and are saving for future transfer thinking it will save tax for all members. Your post seems this will not prevent taxes to club or member?
On Feb 9, 2017 10:56 AM, "Laurie Frederiksen" <laurie@bivio.biz> wrote:
Hi,
Transferring stock in which your club has a gain to fund a withdrawal is a good plan. Just to clarify though, it doesn't mean you avoid paying taxes on the capital gains you have in the stock, it just means your taxes on those gains will be delayed until you withdraw from the club yourselves.
Delaying paying taxes is usually considered desirable.
If you are transferring stocks in which you have a gain, you do not need to worry about wash sale rules. It would be fine to buy shares back again the day after you make the transfer if you want.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
On Thu, Feb 9, 2017 at 10:29 AM, Leonard Gilman Declar.of Trust 7/9/03 <lengee55@gmail.com> wrote:
To payout a withdrawing partner we plan to transfer a stock
in which the club has a substantial gain. I understand that
by doing this the club avoids having to pay a Capital Gains
tax on the gain. Can the Club then turn around and buy the
stock again, or must we wait 31 days to avoid a Wash sale
rule?
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