How is the basis of a stock reported when it is given to a
departing member instead of cash.

The valuation date for a departing member is defined in the
Partnership Agreement.. The amount due this person as well
the value of the stck transfered is established.

It is my understanding that the basis for the stock
transfered is that noted in the above valuation statement.

Assume a year later this past member sells the stock

What documentation, other than the above, is required for
tax reporting purposes for the basis of the stock sold?

Ray Marchand

Ray,

<<
It is my understanding that the basis for the stock transfered is that
noted in the above valuation statement.
>>

The basis for the stock transferred is the member's basis for his/her
entire club interest, less any cash received. If more than one
securities are transferred, the member's remaining basis in the club is
spread to those securities in accordance with a rather complex set of
rules as established by the IRS. The member's resulting basis is shown
on the withdrawal report for that member, and that is sufficient
documentation, since the computation of basis can be determined from
that report. Note, the valation staement used to determine the amount
due the member does not show the basis in the hands of the member, nor
does it give sufficient information to make the computation.

Rip West
Saint Paul, MN

Hello Ray!

I was confused about this, too, until I had to do a couple of them. The
cost basis in the stock changes during the handoff. The club member has a
cost basis in the club, too. The program uses "their" cost basis to
re-evaluate the cost basis in the stock. It's all handled on the withdrawal
statement. Try running one (either in your own club or the sample club) to
see what I mean. You can always back it out.

Lynn Ostrem, President
garbagecop@foxinternet.net
Crow River Investment Club
www.bivio.com/crowriver