My club is dissolving and we've decided to transfer each
members share of the securities to there individual
brokerage accounts. My question is how do we determine who
gets what? Do we just initiate a withdrawal action for each
member? Not everyone in the club joined at the same time so
obviously each member does not own the same number of units
of the portfolio.

I understand the losers vs. winners concept, but I'm
confused by your comment that we have "lost on those stocks
whether or not we sell them". If we transfer the stocks to
our individual portfolios and continue to contribute
independently to our own portfolios, then why have we lost
on those stocks?

Rip West wrote:
> Hi again, Debbie,
>
> I didn't follow up on our
> previous exchange, because I was perplexed by your reason for not selling losers
> before you disband the club. You said....
>
> <<
> The reason for
> choosing to transfer stock versus selling was
> so that we did not lose on the
> stocks that were selling for
> less than cost basis right
> now.
> >>
>  
> That might make some sense if you are convinced that all
> those stocks are coming back. In other words, that each one will be a winner. If
> so, then your plan will save you the commission on selling the stocks and
> rebuying them individually. However, I hasten to add that you have lost on those
> stocks, right now, whether or not you sell them.
>  
> At any rate, to answer  your question, after you have
> recorded all your expenses, and stock sales, do a valuation and a member's
> status report. Since your broker will probably not issue fractional shares, you
> will have to divide up the number of shares between your members as close as you
> can, considering each member's percentage. Then you can enter a withdrawal for
> each member, and show the number of shares each will be taking. The program will
> figure out how much cash is due to each member.
>  
> It is not clear to me if each member will be opening an
> account with the club's broker, or if the plan is the have the broker transfer
> the shares to each member's broker account. If the latter, you should check on
> what the cost will be. It probably would be cheaper to sell the stocks and
> distribute the money.
>  
>
>
>
>
> Rip West
> Saint Paul, MN

Hmm . . . I think I get where the confusion on this is
coming from - we were not thinking of a transfer as a sell
transactoin, but I assume it is. So, when the club
"transfers" the stocks, this is considered a "sell" by the
club - is that the issue? Thus, the club is taking a loss
on those stocks that are losers when we transfer (sell)
them. We were not thinking along those lines, and just
assumed (I guess wrongly) that by transferring the stocks to
our individual portfolios that we were not actually selling
the stock. So, in that case, it makes sense that we should
go ahead and sell the losers before initiating the transfer.

Oh, yes, we all have accounts with the same brokerage as the
club.


Rip West wrote:
> <<
> If we transfer the stocks to
> our individual portfolios
> and continue to contribute
> independently to our own portfolios, then why have
> we lost
> on those stocks?
> >>
>  
> Because they are worth less than you paid for them.
> According to your scenario, you could hold those stocks until they go down to
> zero, and you haven't lost a thing because you haven't sold them.
>
> Rip West
> Saint Paul,
> MN

Thanks Rip! Got it!!

Rip West wrote:
> Hi Debbie,
>  
> We still have confusion. You do have it right. When you
> transfer your stocks to members, you are not selling and you are not recognizing
> a taxable loss. My problem with what you were saying is that I don't understand
> why you don't want to recognize that loss. Your stocks have gone down. If you
> really believe the fundamentals on all your 'losers' are still good, then, fine,
> go ahead and make the transfers.
>
>  
>  
>  
> Rip West
> Saint Paul, MN