Sunsetting a club

Kit Wylly on

We are preparing for the future when we will want to sunset
our club. We have considered two options.
  First option - Sell all stocks and disperse cash according
  to shares owned in the club
  Second option - If the number of shares of each stock
  owned is equally divided by the number of partners, then
  transfer equal shares of stock to the individuals. Does
  the cost basis transfer to the new owner (I think it does)
  and will the brokerage transfer the ownership.

Is there a better way?

Laurie Frederiksen on

This describes the steps you need to follow to close your club down correctly:

Disbanding Your Investment Club

Before you distribute anything to anyone, you will enter a full withdrawal for each member. You can distribute just cash or a combination of stock and cash.

When you fill in the withdrawal form, you will select the shares of any stock to transfer. bivio will then calculate how much cash you also owe the person.

The members cost basis in the club minus any cash they receive becomes the cost basis of the shares of stock they receive. They do not receive them at the clubs basis.

Once you have the withdrawal entered, a withdrawal report is prepared. You can use it to tell the broker exactly which shares to transfer to each person.

There is no reason each member needs to get some of each stock.

Laurie Frederiksen
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On Wed, Oct 14, 2020 at 3:52 PM Kit Wylly via bivio.com <user*30190000001@bivio.com> wrote:

We are preparing for the future when we will want to sunset
our club. We have considered two options.
First option - Sell all stocks and disperse cash according
to shares owned in the club
Second option - If the number of shares of each stock
owned is equally divided by the number of partners, then
transfer equal shares of stock to the individuals. Does
the cost basis transfer to the new owner (I think it does)
and will the brokerage transfer the ownership.

Is there a better way?

Lisa Robertson on

When my club disbanded we first sold only the stocks that were in a loss position, so we could all benefit from the tax write-off. Then I, as treasurer, asked each member to tell me three stocks they would like to own and one that they wouldn't want. I was able to give everyone some of what they really wanted and nothing that they didn't want. Everyone got a different amount of cash to complete the withdrawal of their interest. There were ten of us, and it was a bit like solving a Sudoku puzzle, but it only took an hour or so to figure it out. This option probably wouldn't work for a larger club, but there is no reason to try to give everyone little bits of lots of stocks. Everyone got three or four stocks.
Lisa Robertson
> On 10/14/2020 12:52 PM Kit Wylly via bivio.com <user*30190000001@bivio.com> wrote:
>
>
> We are preparing for the future when we will want to sunset
> our club. We have considered two options.
> First option - Sell all stocks and disperse cash according
> to shares owned in the club
> Second option - If the number of shares of each stock
> owned is equally divided by the number of partners, then
> transfer equal shares of stock to the individuals. Does
> the cost basis transfer to the new owner (I think it does)
> and will the brokerage transfer the ownership.
>
> Is there a better way?

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