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Returning Member

Investment Club Dissolution

Our investment club was dissolved last year, and stock was distributed to members. I am aware of how to transfer partnership basis to the individual stocks.


The question I have is how to record the disposition - there does not seem to be an option that corresponds to this scenario.



2 Replies
Expert Alumni

Investment Club Dissolution

This would be a change in capital for each investment club member, i.e., a reduction to the capital account for all investment club members.  The other side of this would be a reduction in the assets of the investment club which should end at a zero balance.

Returning Member

Investment Club Dissolution



I'm OK with the accounting. The question is how to enter the disposition in TT. The two choices are a taxable or non-taxable event, and if you look at the worksheet, non-taxable is equated with a gift.


Since the IRS guidelines are that a distribution of stock shares to members in the dissolution of a stock club does not constitute a taxable event (share basis is adjusted up or down based on relative member and partnership bases) it's less than optimal to note this as a taxable event, albeit with 0 gain/loss.


I know it's only internal to TT, but I would like to align this entry as much as possible with the actual rules.




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