Gene & others,

Ok, this is sounding like it's not as complicated as I
thought, provided the broker will cooperate. I see that
bivio would let me record, when a member withdraws, that he
was paid by transferring stock.

One piece I don't get is Gene's comment that the club is
"deferring (but not avoiding) taxes on that gain for ... the
club's increased value." Deferring until when? If the stock
is transferred, how & when is the club's gain and its tax on
the gain calculated? If it's only deferred until the taxes
are calculated for the year in which the transfer occurred,
how does that differ from selling the stock & giving the
withdrawing member the proceeds? I'm still missing a piece
of the puzzle.

The club's gain on the transferred stock is embedded in the unit value of the club. The remaining members of the club will recognize their individual share of the gain (for tax purposes) when each of them withdraws from the club.... hopefully many years down the road.

 

Ira Smilovitz