WE have a member who wishes to transfer a portion of their
shares to another member as settlement of a debt. Is this
possible without incurring a taxable event?

The answer is maybe.

The club will need to perform a partial withdrawal for the
debtor in the amount he wants to give to the creditor. This
transaction should be in cash. If the debtor member's basis
in the club is more than the amount he withdraws, the
transaction will not result in him having to pay any tax
now. However, his basis in the club will be reduced so he
may to pay more tax at a later time.

If the creditor wants to buy more units with payment from
the debtor, he can do so and the club's value will not
change. By using the suspense account, no money needs to
leave the broker; provided the treasurer receives written
instructions signed by both members authorizing the
transactions.

Jack Ranby

The answer is maybe.

The club will need to perform a partial withdrawal for the
debtor in the amount he wants to give to the creditor. This
transaction should be in cash. If the debtor member's basis
in the club is more than the amount he withdraws, the
transaction will not result in him having to pay any tax
now. However, his basis in the club will be reduced so he
may to pay more tax at a later time.

If the creditor wants to buy more units with payment from
the debtor, he can do so and the club's value will not
change. By using the suspense account, no money needs to
leave the broker; provided the treasurer receives written
instructions signed by both members authorizing the
transactions.

Jack Ranby

The answer is maybe.

The club will need to perform a partial withdrawal for the
debtor in the amount he wants to give to the creditor. This
transaction should be in cash. If the debtor member's basis
in the club is more than the amount he withdraws, the
transaction will not result in him having to pay any tax
now. However, his basis in the club will be reduced so he
may to pay more tax at a later time.

If the creditor wants to buy more units with payment from
the debtor, he can do so and the club's value will not
change. By using the suspense account, no money needs to
leave the broker; provided the treasurer receives written
instructions signed by both members authorizing the
transactions.

Jack Ranby