Taxes and selling stocks for member withdrawal
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Taxes and selling stocks for member withdrawal Since Schwab does not allow a club to disperse stock to individual members who are leaving; we have sold stock. That means the whole membership has to pay capital gains for the stock being sold. Or is my senior mind not "understanding"? Thanks Dan Cohn NAMC Investment Club #3 Atlanta Dan Cohn 404 862 5640 You are correct. After we had to sell stock to pay a withdrawing member Schwab sent me a survey which I gladly filled out blasting them about this policy. An actual person called me back to talk further about it but I was at work when they called and could not answer the phone. I called back but was not able to talk to someone and left a message. If enough clubs does that then they might change their policy.
You can transfer your account to Fidelity where you can transfer stock to an individual's account. It is not an easy process to do because you must furnish each member's signature twice--once attached to your bylaws and once just to signify the membership.
Dan, My understanding is that the members of the club will inevitably be responsible for tax on any capital gains generated by the club's portfolio, it's just a matter of timing. The whole point of transferring stock to departing members is to avoid generating the capital gain in that specific year to the remaining members. Those remaining members may not be prepared to take that gain at that time, especially if it is significant. If I am incorrect in my understanding, I hope someone will set me straight. Linda
From: club_cafe@bivio.com <club_cafe@bivio.com> on behalf of Rebo Reeves via bivio.com <user*34255900001@bivio.com>
Sent: Monday, September 25, 2023 6:31 AM To: club_cafe@bivio.com <club_cafe@bivio.com> Subject: Re: [club_cafe] Taxes and selling stocks for member withdrawal You can transfer your account to Fidelity where you can transfer stock to an individual's account. It is not an easy process to do because you must furnish each member's signature twice--once
attached to your bylaws and once just to signify the membership.
There was a post today in the Better Investing treasurer's forum (good luck finding the way to join as BI does not make it easy to find) re a club disbanding and they found a way to transfer stock from their Schwab club account to partners. Not sure if this method will work for an individual withdrawal. That said, I have pasted the thread below. Hi - we are also in the process of disbanding our club and we just transitioned from TDA. We asked everyone to open Schwab accounts then got a "Move assets from My Schwab Brokerage Account" form. Completed it and took to a Schwab branch. I'm sure you can upload or fax instead. It all happened very quickly. Still working on lot info questions. Not fully closed as we are expecting a dividend yet. Treasurer will be last to get cash. Mostly stock was transferred with a little cash to balance. Final valuation included all dividends. Your process for voting and disbanding probably depends on your partnership agreement. Don't know anything about BIVIO but maybe you can enter dividends early - if you know exact amounts - spinoff may be a problem. On Mon, Sep 25, 2023 at 1:30 PM Barb & Glenn Doherty via bivio.com <user*33500400001@bivio.com> wrote:
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