Would the Member Tax Allocation report give the amount of
tax to report after the audit instead of waiting for the K-1
since that form isn't sent to the IRS anyhow?

Carolyn Raftis
MHB Investment Club

Carolyn Raftis wrote:
> Would the Member Tax Allocation report give the amount of
> tax to report after the audit instead of waiting for the K-1
> since that form isn't sent to the IRS anyhow?
>
> Carolyn Raftis
> MHB Investment Club

Carolyn:

There may be other items that need adjustment, but at a
minimum the dividends are not broken out by qualified and
non-qualified amounts. You may be able to perform that
calculation manually, but why would you want to?

More fundamentally, the data used to prepare the report
cannot be compared to the broker's 1099 yet.

So I have to ask--what is the rush? There is no prize for
being the first club to file its partnership return or issue
K-1s. If fact, the sooner the return and K-1s are prepared,
the more chance there is that an amended return and K-1s
will have to be prepared when the broker issues an amended
1099.

I believe most members prefer accuracy over speed. The worst
thing would be for a member to have to file an amended
federal and state tax return over an adjustment to their
investment club K-1. I prefer to let the computers do the
number crunching instead of me. So I will wait till late
February before addressing tax returns. By then the broker
has issued at least one (some years two) 1099s, the IRS has
finalized the tax forms so bivio can program its computers,
and the tax returns can be prepared by me simply by pushing
a few keystrokes after verifying the data in bivio compares
with the 1099.

I don't mean to pick on you, but every year I see messages
from Treasurers who are fretting over how soon they can
prepare the K-1s. It seems they have less patience than a
child waiting for Santa Claus. My advice is chill; let the
process work.

Jack Ranby, Treasurer
Grants Partners Investment Club