club_cafe: Re: thinking about taxes already

iras1 on

In a message dated 5/13/2007 9:06:53 A.M. Eastern Daylight Time, eupdike@bivio.com writes:

To answers some of the questions.

Our group is moving money around. Some of our long term
investments (GLW - held for 5 years, SCRX) and our short
term (AAPL, MA, IBM) have done well and we want to lock in
our profits. We will be reinvesting the money, no one is
cashing out.

The reason I asked the question is we don' t have any
deductions year over year and I want to make sure that I
don't miss out on any. The first person responded
mentioned dues.. what did you mean by that. This club is
made up of 6 people (family) and we don't have any dues set
up now. What do you use them for?

I understand food doesn't qualify, but what about traveling
to get the group together. If the group wants to travel, is
there anyway to get the trip as an expense ? Travel to
check a compay out?? Just looking for ideas that other
groups may using to offset some of their captail gains.. if
there are any.

I believe Jim was referring to BetterInvesting dues (personal and/or club). Additional deductible expenses would be the cost of your bivio subscription, printing and postage for your tax returns, tax preparation and software expenses (free with bivio), bank and brokerage fees (but not commissions which are directly added to cost basis), etc. Travel expenses are rarely deductible -- the two examples that you provide are expressly nondeductible. You might want to look at IRS Publication 550, Investment Income and Expenses for more information on what is and is not deductible. You can find it at www.irs.gov/pub/irs-pdf/p550.pdf.

Ira Smilovitz

See what's free at AOL.com.

Jim Thomas on

In my experience, the dollar amount of legitimate investment
club deductions are quite small. The personal portion of BI
membership dues are likely the largest of these.

If your club and it's members don't belong to BI, the dollar
amount of any legitimate deductions are likely to be *very*
small. The cost of your bivio subscription might well be
your club's largest (or even only) deductible expense. For
my club in 2006, the *only* deductible expenses were BI
membership dues and our bivio subscription.

Beyond those Ira mentioned, the only other substantial
deductible expense I can think of would be if your club
subscribed to Value Line or Morningstar or something
similar.

> I believe Jim was referring to
> BetterInvesting dues (personal
> and/or club).

It was Lynn who said ...

>> Most of our clubs have fairly small
>> dues; $25-$50 per month.

... and I believe she was refering to member investments
(not deductible BI dues).

BTW, I try hard to avoid using the term "dues" to describe
"member investments". The term "dues" suggests (at least to
me) something owed to the club (an expense or fee) with no
expectation that it will ever be repaid.

I prefer the term "member investment", to reflect the
expectation that, eventually, substantially more will be
repaid.

-Jim Thomas

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