Our club is selling stock this year because we decided to
disband.  Is there a resource with information about the tax
implications of the monies we will receive, i.e., tax season
2006, so that it won't be an unpleasant surprise?!

Thank you for your help!

Maxine
Prime Investors 6

It's the same as if you continued in operation. When the club prepares its final tax return, the sales of stock will be reported as capital gains (or losses) and allocated to the members in proportion to their ownership share at the time of sale. This will appear on the final K-1s issued to each member. Similarly, the excess (or shortfall) of cash that each member receives from the final distribution of club assets over the amount that member contributed plus the allocated earnings/expenses will be shown on the withdrawal report given to that member. This gain/loss will be reported will be reported separately on Schedule D from any amount transferred from the K-1.

 

Ira Smilovitz