No, you've misinterpreted what I wrote. I'm in total agreement with Jerry Dressel.
Ira Smilovitz
In a message dated 09/26/09 10:07:48 Eastern Daylight Time, kittiecaldwell@earthlink.net writes:
I am really confused now. In July, Jerry Drssel said to nsell the stocks held at a loss to fund a member leaving and now you are saying sell the ones with gains. We
-----Original Message-----
From: iras1
To: The Club Cafe
In a message dated 09/21/09 11:32:56 Eastern Daylight Time, nkalbrecht@yahoo.com writes:
Good morning,
I am a new Treasurer seeking advice I can share with my club. We have a member requesting a full withdrawal. We are a small club and we have plenty of cash on hand to fund the withdrawal. (that is a separate issue...)
A motion is on the table to fund the withdrawal from cash on hand. How does the accounting work in bivio; specifically how does it impact others in the club. I appreciate any thoughts or guidance.
Here is what I have found in my research:
"From a tax standpoint, let's assume......
- The club pays withdrawing members with cash on hand.
The source of this cash can be from existing cash on hand or additional payments by the remaining members. Members who withdraw realize a gain or loss upon withdrawal. The gain or loss is based on the difference between their cost basis in the club and the cash withdrawn.
This method has no effect on remaining members. NOT GOOD, NOT BAD. The club and the withdrawing member may be better off from a tax standpoint by distributing appreciated stock to a withdrawing member. "