Adding members whom are minors
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Adding members whom are minors I am wanting to add two new members (brothers) who are minors. Can someone explain to me how I will go about setting this up? Will there be anything special that I will need to do to accomplish this? Accounting issues, brokerage issues, tax issues? Thanks for all of your help in advance! Garrett There are no accounting or tax issues as long as the minors' social security numbers are on the K-1. They will have to file their own tax returns if there are any capital gains/losses. If the only income is dividend/interest, then their parent(s) can elect to treat the income as their own for income tax purposes.
The remaining issues are mostly legal and would depend on your state's rules. You might need to establish their membership as custodial accounts with an adult as custodian. The brokerage will certainly require it if you notify them, but most clubs do not provide updates to their broker when new members join.
Finally, your club will have to decide whether to allow the minors to vote on club matters. This goes back to the legal question and whether a minor can make or be held to a legal obligation.
Ira Smilovitz
Join me at InvestEd 2010
Investor Education at Its BestTM Baltimore, MD August 6 - 8, 2010 http://www.investor-education2010.org/ In a message dated 06/22/10 15:16:35 Eastern Daylight Time, gawsmith@bivio.com writes:
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