Accounting Question

Jay Sternin on

Club members are discussing asking any future members to pay
a one time additional $15 to cover misc. expenses. They
feel this one-time fee should not but them any additional
fractional shares

How would I handle this in Bivio? Just deposit it as a
separate check to our brokerage acct and don't assign the
brokerage transaction to any member??

Thanks............Jay

Laurie Frederiksen on

Hi Jay,

If you want to do this, you can record it using the fee link next to the members name on the
Accounting>Members page.

It will go into your club's pool of assets and be shared by all members based on their ownership
percentages.

It will be available for either investing or payment of expenses. Your club can decide what
they'd like to do with it.

Laurie Frederiksen
bivio Inc.

Jay Sternin on

Laurie,
Thanks. Does that mean that the "fee" is or is not included
in the member's basis for tax
purposes?...........thanks...........Jay

Laurie Frederiksen wrote:
> Hi Jay,
>
> If you want to do this, you can record it using the fee link next to the members name on the
> Accounting>Members page.
>
> It will go into your club's pool of assets and be shared by all members based on their ownership
> percentages.
>
> It will be available for either investing or payment of expenses. Your club can decide what
> they'd like to do with it.
>
> Laurie Frederiksen
> bivio Inc.

iras1 on

The fee is included in the member's tax basis, as it should be.

1) Assume a club with unit value of $10 and the new member joins with a $100 deposit. If there is no fee, he has 10 units, $100 of value and $100 tax basis.

2) Now assume the same facts except the club assesses a $15 new member fee. The new member contributes $115, receives 10 units (for the $100 contribution), $100 of value and $115 tax basis.

Ira Smilovitz

In a message dated 07/10/09 12:21:17 Eastern Daylight Time, jsternin@bivio.com writes:

Laurie,
Thanks. Does that mean that the "fee" is or is not included
in the member's basis for tax
purposes?...........thanks...........Jay

Laurie Frederiksen wrote:
> Hi Jay,
>
> If you want to do this, you can record it using the fee link next to the members name on the
> Accounting>Members page.
>
> It will go into your club's pool of assets and be shared by all members based on their ownership
> percentages.
>
> It will be available for either investing or payment of expenses. Your club can decide what
> they'd like to do with it.
>
> Laurie Frederiksen
> bivio Inc.

Jim Thomas on

> Club members are discussing asking any future members
> to pay a one time additional $15 to cover misc. expenses.
> They feel this one-time fee should not but them any
> additional fractional shares

Collecting additional funds from any member is unnecessary and irrelevent to
whether that member helps pay club expenses. When an expense is paid,
*every* member shares that expense. Where the money used to pay the expense
came from has nothing to do with anything.

However, if your club insists on doing unnecessary and irrelevent things,
then record the money as a "fee", as Laurie described. A "fee" does not
purchase units but does get included in the member's tax basis.

-Jim Thomas

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