club_cafe: Last re: Dividends
Yes.
Ira Smilovitz
In a message dated 11/9/2004 12:28:37 PM Eastern Standard Time,
ted_metro@bivio.com writes:
One last
question, I apologize, but thank you for the excellent responses.
So
capital gains/losses would be treated similarly as dividends in regards to
increasing or decreasing a tax basis??
IraS1@aol.com wrote: >
Increase or decrease (if expenses/losses are greater than income).
Actually > the change doesn't necessarily equal the taxable portion
reported on the K-1 > forms because nondeductible expenses
and returns of capital also affect the > tax basis. But the concept
is the same. > > You can see the change by running a member
status report on 12/30/03 and > then on 12/31/03 if your club was in
existence last year. > > Ira Smilovitz >
> In a message dated 11/9/2004 11:56:23 AM Eastern Standard
Time, > ted_metro@bivio.com writes: > So on >
12/31 the "Total Paid" column on Bivio will just > increase for each
member > relative to their proportionate > share of
dividends received during the > calendar year?
Which > means the increase would equal their taxable >
portion > reported on their respective K-1 forms? > > Thanks
for the quick > and informative
reply!!! > > > IraS1@aol.com wrote: > >
Yes, > dividends (and other income and expense) impact the
cost basis of the > > > members in your club.
However, the method for accounting for that change >
is > > somewhat different from that used by mutual funds. >
> > > > Within bivio, the cost basis
adjustment is made on December 31 > after the > >
tax allocations have been determined. Unlike a mutual
fund, > where the dividends > > are actually paid
out to the investors who then > have a choice of whether
to > > reinvest the dividend or keep the cash, >
investment club "dividends" are always > > reinvested. So, rather
than > lowering the price per unit and purchasing
more > > units and the new > (lower) price,
bivio keeps the current unit value > > constant
and > raises the cost per unit for each of the units you
already own. The > > > net result is the
same. > > > > Ira Smilovitz >
> > > > In a message dated 11/9/2004
10:01:00 AM Eastern Standard > Time, > >
ted_metro@bivio.com writes: > > Do >
> > dividends impact the cost basis of the
members in our > > club? It > seems >
> that because dividends raise the value of >
> > the share price, they would have >
> to be paid out as > a > >
distribution (like a mutual fund) in order to >
impact > > cost > > basis. Then the share
price > would have to be adjusted down > >
to > > reflect the > payout of the
dividends, even though most (if > > not all) >
members > > would just reinvest those dividends
in > more > > shares (adjusting their cost >
> > basis). > > > > I guess
it seems to me like a mutual fund. They >
collect > > all > > these dividends throughout
the year, > but until they pay them > > out >
> (usually in December) > my cost basis
doesn't change, but > > my fund's share >
> > price is going up as the total value
has > > gone up from > dividends. >
> > > Can > > someone confirm or
correct > me about how dividends may or > > may not
impact our > > > cost basis information
for members?? > > > > > > > > >
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