club_cafe: Re: out of state potential member/s?

iras1 on

In a message dated 8/10/2007 10:40:13 P.M. Eastern Daylight Time, etana_finkler@bivio.com writes:

Ira, I get chills thinking about doing taxes for the club
(rather, helping the treasurer, neither of us has any clue
to complleting taxes)... Makes me want to disband the club
to avoid it.

what does this mean?
>your club doesn't invest in another partnership that has actual business >income which is sourced to MD

If we are only investing in stocks, and none of the stocks
are companies in Maryland or DC, then it shouldn't be more
difficult than it will be with the MD members... Is that
what you said?

Not quite. It's much simpler than you're making it. The general rule is that income from intangibles (stocks, interest, dividends, etc.) has no source and is taxable to the state of which you are a resident. Income from employment, business operations, sales of tangible assets are taxed both to the state where located and the resident state (though often one state will credit you for taxes paid to another).

As long as you are investing in stocks of corporations, it doesn't matter where they are located or do business because the income will be from intangibles. What you have to watch out for are investments in limited partnerships, publicly traded partnerships, and natural resource royalty trusts. If you invest in these entities you will be treated as if you were running the business, not just as a passive investor. The club and each of the members may have to file tax returns in every state in which the entity does business. If the entity does business in MD, that portion of the income will be MD-source and the club will have to withhold taxes for any nonresident partners.

Ira Smilovitz

Get a sneak peek of the all-new AOL.com.

Arthur Klages on

You also might check out the circumstances of filing state income tax
returns in the involved states..

In North Carolina, where our club is located, partnerships whose sole
activity is investment, are exempt from filing state tax returns.

If your state(s) have the same ruling ,your club would then only need to
file the federal Tax Return.

Bivio Account Sync for 99$/year is a real steal. With practically no input
from you Bivio will automatically print out your federal tax returns and
K-1's as fast as your printer runs.

Arthur Klages, Treas.
Senior Investment Club
Greensboro NC

Etana Finkler on

Arthur and Ira,
You have really relieved my stress!

Thanks so much, Etana

Arthur Klages wrote:
> In North Carolina, where our club is located, partnerships whose sole
> activity is investment, are exempt from filing state tax returns.
>
> Bivio Account Sync for 99$/year is a real steal. With practically no input
> from you Bivio will automatically print out your federal tax returns and
> K-1's as fast as your printer runs.
>

Etana Finkler on

Phil and Sandy Starr on

My Investment Club is in North Carolina and we have to file an income tax
form to the State. I file a D-403 Partnership Income Tax Return and I
include 403 part 3.A. We are an investment club and our sole activity is
investing. The State has never said I didn't need to file it.

----- Original Message -----
From: "Arthur Klages" <aklages@triad.rr.com>
To: "'The Club Cafe'" <club_cafe@bivio.com>
Sent: Saturday, August 11, 2007 11:11 AM
Subject: RE: club_cafe: Re: out of state potential member/s?

>
> You also might check out the circumstances of filing state income tax
> returns in the involved states..
>
> In North Carolina, where our club is located, partnerships whose sole
> activity is investment, are exempt from filing state tax returns.
>
> If your state(s) have the same ruling ,your club would then only need to
> file the federal Tax Return.
>
> Bivio Account Sync for 99$/year is a real steal. With practically no
> input
> from you Bivio will automatically print out your federal tax returns and
> K-1's as fast as your printer runs.
>
> Arthur Klages, Treas.
> Senior Investment Club
> Greensboro NC
>
>

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