Not only do you have to file another tax return in 2008 for the fractional shares, you will probably receive some dividends in 2008 from stocks that were past their ex-dividend date before you sold them. Additionally, you have to file a return in 2008 because you didn't distribute the funds to the members until 2008. Their withdrawals will all be dated in 2008 and their capital gains/losses on membership in the club (separate from what's reported on Schedule K-1) will be reported on their 2008 income tax returns.

The only way to guarantee closing up a club before the end of the tax year is to start everything at least two months before the deadline.

 

Ira Smilovitz

 

As treasurer I sold all of our holdings as of 12/31/2007 -
however the fractional shares sold on 1/2/2008.

So - am I going to have to file another tax return for 2008
for those fractional shares?