Dissolving an Investment Club

cw8choc on

I'm assuming that only whole shares could be transferred, right? So if we have 30 shares of a particular stock, and the split among our members leaves 1 or 2 shares left, I couldn't transfer fractional shares. Would it be a good idea to sell the remaining shares?

----- Original Message -----
From: Laurie Frederiksen <laurie@bivio.biz>
To: The Club Cafe <club_cafe@bivio.com>
Sent: Wed, 22 Mar 2017 14:58:01 -0400 (EDT)
Subject: Re: [club_cafe] Dissolving an Investment Club

That is good advice Linda. Transferring stocks correctly can get complicated.

You don't want to transfer any shares in which you currently have a loss either.

If you do have some of those, you should sell them to recognize the loss. Once you do that, you'd also have losses that would offset some of the gains from selling other stocks.

Laurie Frederiksen
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Laurie Frederiksen on

If you have round numbers of shares, those wouldn't be fractional shares. Fractional shares would be something like .728 shares of a stock. You are correct that if you had those, they should be sold.

There also is no reason you need to transfer some of each stock to each person. When you do a full withdrawal with stock, the clubs tax basis in the shares is replaced with the members tax basis in the club.

Here is more about transferring shares in a withdrawal:

Full Withdrawal Paid With Stock

I'd highly recommend you run your plans by us in support before you make any distributions. They are just about impossible to correct after the fact.

Laurie Frederiksen
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www.bivio.com

Become our Facebook friend! www.facebook.com/bivio
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