We have an investment club with 31 members. It was formed as a partnership in Feb. 98. Does anybody know what return we need to file for the club and personally if any. We have not sold any stocks and just have some minor divs and interest. You can email me at firstname.lastname@example.org Thank you
[[We have an investment club with 31 members. It was formed as a partnership in Feb. 98. Does anybody know what return we need to file for the club and personally if any. We have not sold any stocks and just have some minor divs and interest. ]]Regardless of what happened within the investment club, your tax filing will depend upon how you were organized. Most clubs are organized as partnerships, which means the filing of a Form 1065, and filing of Schedules K-1 for each partner. And if you have had members jumpin in and out during the year, you may have some difficult computations to report the transactions to each partner on a "weighted" basis.You can read more about investment club taxes in the Motley Fool Investment Club Primer (available in Fool Mart), or move on over to the National Association of Investment Clubs home page and order their tax book. TMF TaxesRoyWant to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. It'll help you with your 1998 taxes, and it's never to early to start planning for your 1999 taxes. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.
I would also recommend that you get some of the NAIC information. Their methods for record-keeping have always been helpful to me, and I've been an Investment Club Treasurer for the last 20 years or so in 2 different investment clubs. Also, they usually have an article in the February [I think??] issue of Better Investing that desribes how to fill out the 1065 and Schedule K's line-by-line. I have always found that to be very helpful.I would also suggest that you update your reporting tool, whatever that may be, to calculate the club taxes for you. I have a spreadsheet that I use that breaks out all the tax information for me, and I just transfer it over to the right lines. It's something I put together on Excel that I've used for the past couple of years, and I tend to improve on it just a little every year when I notice I'm missing something. I'm pretty sure NAIC also has investment club software, but I haven't used it so I don't know much about it.Generally, as long as you have all the records, the taxes aren't that bad although they can get more complicated as members come and go or take partial distributions. For year end, I generally print out the 12/31 valuation, do the earnings distribution, print out the ledger for the year, and do a printout of all the member accounts. I keep all that plus a copy of the taxes for every year.
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