Hi George,

I'm sure Laurie will find you some instructions, but if you can liquidate your holdings (either sell or transfer to club members), distribute the final dollars, and close the accounts before December 31st, then you won't have to do 2012 taxes. If you sell everything on December 31st, you still have to distribute, which means you carry your business over into 2011, hence taxes in 2012.

Now, consider this. Close your books on, say, October 1st. Run a Valuation Statement and a Member Status Report on that date. Whatever dollars are owed to each departing member will be on that Member Status report. Now, as a group, divvy up any stocks that are in the black. Bivio's withdrawal report will properly recalculate the cost basis of each stock, based on the member's cost basis in the club. That means, no one will get stuck with the "club's" capital gains. It works really slick! After everyone agrees to take the winners, run a full withdrawal for each member, based on the stocks they will take.

Most brokers offer/accept stock ownership transfers, usually for free. But check with your broker. Then just get the account numbers and routing information from each members personal broker. If they don't have a broker, they can set up a free account at a number of places. I use www.firstrade.com.

Then sell the losers for the capital loss, and divvy up the leftover cash based on the balance owed to each member as stated on their individual withdrawal statements. Then proceed with closing everything.

On your final 1065, it will ask if this is your last filing. No need to "cancel" your EIN number. The IRS will handle it with your return.

If you have questions, write back.

Lynn Ostrem, President

Crow River Investment Club