is there a report that shows "tax" contributions (i.e. w/o
fees)? Both the Member Status Report and the
Contributions/Withdrawal Report seem to show contributions
as including fees. What happened to the "member tax basis"
report?

I don't follow your question. Are you under the impression that when a
member makes a fee payment that this payment does not increase his/her
tax basis? If so, your understanding is wrong. The Member Status report
does show the member's tax basis.

Rip

Yes, that was the assumption I was under. Why would a fee increase the tax
basis? Isn't it income to the partnership and a portfolio deduction to the
member?

-----Original Message-----
From: club_cafe-owner@bivio.com [mailto:club_cafe-owner@bivio.com] On Behalf
Of Rip West
Sent: Monday, April 26, 2004 12:24 PM
To: The Club Cafe
Subject: Re: club_cafe: Contribution report

I don't follow your question. Are you under the impression that when a
member makes a fee payment that this payment does not increase his/her
tax basis? If so, your understanding is wrong. The Member Status report
does show the member's tax basis.

Rip

<<
Why would a fee increase the tax basis? Isn't it income to the
partnership and a portfolio deduction to the member?
>>

No, a fee assessment is not income to the partnership. When a member
makes a fee payment, the partnership's cash account is increased
[debited], and the member's capital account is increased [credited]. The
same thing happens when a member makes a regular payment, except that,
in that case, the member also receives additional units.

Rip

I found some of the older discussions on fees and maybe the misunderstanding
is on my part. In our case, the "fee" is a charge to the member, not a
reimbursement for expenses. The paying member does get a small benefit for
the fee because of his allocation of the income, but I'm not sure I see why
he would get basis for it.

-----Original Message-----
From: club_cafe-owner@bivio.com [mailto:club_cafe-owner@bivio.com] On Behalf
Of John Medio
Sent: Monday, April 26, 2004 12:29 PM
To: 'The Club Cafe'
Subject: RE: club_cafe: Contribution report

Yes, that was the assumption I was under. Why would a fee increase the tax
basis? Isn't it income to the partnership and a portfolio deduction to the
member?

-----Original Message-----
From: club_cafe-owner@bivio.com [mailto:club_cafe-owner@bivio.com] On Behalf
Of Rip West
Sent: Monday, April 26, 2004 12:24 PM
To: The Club Cafe
Subject: Re: club_cafe: Contribution report

I don't follow your question. Are you under the impression that when a
member makes a fee payment that this payment does not increase his/her
tax basis? If so, your understanding is wrong. The Member Status report
does show the member's tax basis.

Rip

But as a practical matter, how can the member increase his capital account
without a change in the income allocation? If the club were to liquidate
immediately, that member would have a capital loss because the other members
we allocated part of his contribution (since he didn't get units for it),
right?

Rip, I found your article from some time ago where you discussed the "late
fee" and I think I see your point.

-----Original Message-----
From: club_cafe-owner@bivio.com [mailto:club_cafe-owner@bivio.com] On Behalf
Of Rip West
Sent: Monday, April 26, 2004 12:35 PM
To: The Club Cafe
Subject: Re: club_cafe: Contribution report

<<
Why would a fee increase the tax basis? Isn't it income to the
partnership and a portfolio deduction to the member?
>>

No, a fee assessment is not income to the partnership. When a member
makes a fee payment, the partnership's cash account is increased
[debited], and the member's capital account is increased [credited]. The
same thing happens when a member makes a regular payment, except that,
in that case, the member also receives additional units.

Rip