Investment clubs should have very few expenses and they usually afford little, if any tax benefit for the members, but the topic of expenses creates a disproportionate amount of questions and concerns amongst club members.

By default, the IRS assumes partnership expenses are allocated to each member based on their percentage of ownership. This is also the default allocation method in bivio. If, however, you include the wording shown here, you can elect to allocate an equal dollar amount of an expense to each person (in bivio, you would check that it is entered "Per Partnership exception"), regardless of his or her percentage of ownership. Without this being specifically called out in your partnership agreement, you would not be allowed to do it.

You can find out more under the topic of Expenses on our help page.

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Disclaimer: statements are opinions expressed by bivio Customer Support and are not official statements from any government agency. These statements are not intended to replace professional legal or accounting advice. When in doubt, follow the advice of your lawyer or accountant who is familiar with your particular circumstances and the laws of your state.