Support for Club Accounting 3

The current version is Club Accounting 3.2.1. View the release notes for recent updates.

Hardware and Software requirements for Club Accounting 3

Hardware requirements:
600 MHz Processor (1 GHz Recommended)
128 MB RAM (256 or more Recommended)
800X600 screen resolution (1024X768 Recommended)
20 MB Free hard drive space on primary C: drive
CD-ROM Drive
Reliable dial-up connection (Cable or DSL connection recommended)

Software requirements:
Microsoft Windows 2000, XP (Service Pack 2), Vista, or Windows 7.
Microsoft MDAC 2.8 and .NET Version 2
These may require extra downloads for Windows 2000 or Windows XP, but are automatically installed as part of newer versions of Windows.

If installed on Windows Vista or Windows 7, the following adjustments must also be made for correct operation:

• With Club Accounting closed, click the WINDOWS button in the lower left corner of your screen.
• Go to COMPUTER > C:\ > PROGRAM FILES > ICLUBcentral > CLUB ACCOUNTING 3
NOTE: 64-bit users should go to COMPUTER > C:\ > PROGRAM FILES(x86) > ICLUBcentral > CLUB ACCOUNTING 3
• Once inside the Club Accounting 3 folder, right-click on the Club Accounting 3 icon, then click PROPERTIES.
• On the properties window, click the COMPATIBILITY tab.
• On this tab, click RUN THIS PROGRAM IN COMPATIBILITY MODE.
• Make sure the selection under this shows Windows XP (either service pack 2 or 3)
• Also on this tab, click RUN THIS PROGRAM AS ADMINISTRATOR.
• Click APPLY, then OK.
• If you have the User Account Control (also called UAC) active, Windows will now ask you to Cancel or Allow the program when you open it. Click ALLOW to let the program run as normal.

How do I enter an unusual accounting transaction, such as a merger, spinoff, or split?

Confused on how to enter an unusual accounting transaction? Click here to get step-by-step instructions for how to enter them all, from the normal to the one-of-a-kind.

How do I close my Club Accounting books at the end of the year?

Strictly speaking, "closing the books" is a misnomer. You don't have to put everything on hold while you finish out last year's transactions. You can continue to record next year's transactions while finishing this year's transactions in preparation for filing the partnership tax return.

A few warnings and reminders to start:

• If you are still using Club Accounting versions 1 or 2, you must move to Club Accounting 3 (CA3) or myICLUB.com to run your taxes.
• Do not enter ANY transactions on 12/31 (of any year) except the valuation. No deposits, no sales, no interest, no withdrawals. If the broker or bank say the transaction is on the 31st, move it to the 30th in the software.
• If you can't make it on time, you can ask the IRS for an extension. Visit www.irs.gov for more information. The partnership return is due on April 15th.
• Want to know how Club Accounting determines how to fill out the form? Read the article.
• You will not be able to finish processing the year's transactions until you have all your paperwork. For most clubs, this date will not occur before the end of January. When you have all the statements, balances, and reports for December, here's how to proceed with your year-end tasks.

Closing the Books

1. Verify all members' addresses, Social Security Numbers (SSNs), and the club's Tax ID (EIN). Check your paperwork against the software.
2. Correctly identify all mutual funds, REITs, and other securities (Limited and Publicly Traded Partnerships, etc.). Select SECURITIES and double-click on the security name.
3. Double-check the ex-dividend dates for each dividend your club received in the previous year. Go to REPORTS > DIVIDENDS REPORT. Not sure what an ex-dividend date is or how to find out? Read the article for the full explanation. If the ex-dividend date is incorrect, you may be paying too much in taxes. Correct the dividend by going to TRANSACTIONS, double-clicking on the dividend, and correcting the ex-dividend date.
4. Enter all your club transactions up through 12/31.
5. Reconcile your Club Accounting records with bank, broker and all dividend reinvestment plan (DRP) statements.
6. Wait until you have received all 1099s from companies. This can be as early as mid-January or as late as the end of February, depending on the company.
7. Display the Transaction Summary Report for full year (REPORTS > TRANSACTION SUMMARY)
8. Add Charges Paid by Company, if necessary (TRANSACTIONS > CHARGES PAID BY COMPANY)
9. Match the total reported on Form 1099 received from company. If it does not match, you can correct it now or make a note and set it aside for the audit committee (as described in point 9, below).
10. Select TOOLS > YEAR-END TASKS to start the Year-End Wizard. Follow the on-screen instructions.
11. Print Allocation of Income and Expenses for all members (REPORTS > ALLOCATION OF INCOME AND EXPENSES)
12. If your club does not already have an audit committee, appoint three members to review the books for the year. Give them all the paperwork, access to the software and data, a printout of each report for the year, a few highlighters, and a box of coffee. Their goal is to review the books to their satisfaction and the satisfaction of the club. They should provide a signed document certifying their review to be presented at the next meeting and saved in the club's records.
13. Run the Federal and State Tax Printer software, available for latest tax year at the ICLUB.com store.
14. Print two (2) copies of Form 1065, one for the IRS, one for the club's permanent records. Print a third copy for your state, if your state requires it.
15. Print three (3) copies of Schedule K-1 for each current member and any former member who withdrew during the year.
16. Attach one (1) Schedule K-1 for each member to Form 1065 for IRS filing.
17. Give one (1) copy of the member's Schedule K-1 to each member or withdrawn member for their personal taxes, along with a copy of their withdrawal report.
18. Keep one (1) copy with the club's copy of the IRS filing in the club's permanent records.
19. Mail your Form 1065 tax filing to the IRS before April 15, certified mail, return receipt requested. This is a precaution against the IRS claiming that you did not file on time. Non-filing and late-filing penalties are calculated per month and per member. To find out where to send your club's forms, visit the IRS' "where to file" page. There is no street address - the post office knows where to send it based on the name IRS, the city, and the ZIP + 4.
20. Attach the return receipt to the Club's copy of the IRS filing.
21. You're done. Relax, and remind your club that they owe you dinner for the work you've just done.

Where can I find security ex-dividend dates?

Changes to the tax laws in Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) define certain dividends as "qualifying" for lower tax rates if the shares are owned for 60 days in the window starting 60 days before the ex-dividend date and ending 60 days after the ex-dividend date.

The ex-dividend date is the earliest date on which a club can sell a stock paying a dividend and still receive that dividend. The ex-dividend date is two trading days before the record date and typically between two and five weeks before the payment (transaction) date. For more on ex-dividend dates, see the SEC's web site.

If your broker statement does not include the ex-dividend dates, you can use StockCentral.com to retrieve them:

1. Go to StockCentral.com.
2. Click on TOOLS > RESEARCH LINKS.
3. Once you're on this page, enter a ticker in the upper right and click GO. Then click on the link labeled VIEW DIVIDENDS under the company profile. This will display all dividends with corresponding ex-dividend dates.

See this article for more on the tax law change and why it affects investment club accounting.

What is Compound Annual Return and how is it calculated?

Club Accounting uses what is called an "Internal Rate of Return" (IRR) calculation to calculate these returns. This type of calculation takes into account both the time when money was invested and the amount of money that was invested. Admittedly, it is a complex calculation that is best not attempted manually but rather left to the computer. Hopefully, the following explanation will make it understandable. But, first, let's define what we mean by the terms "Compound Annual Rate of Return" (CAR) and "Total Return."

CAR is the rate of return most of us are familiar with when we talk about interest paid on a bank savings account, certificate of deposit or a home mortgage. It is the yearly rate of return that is earned or paid and that usually is compounded daily, monthly, or yearly. The more often the compounding is done (interest earned on interest paid) the larger the amount will be for the same rate of CAR. Club Accounting uses daily compounding. However, for simplicity we will use yearly compounding in all of our examples.

Total Return is the return earned over a specific period of time. For example, if one invests $100 at 6% CAR for six months you would have $103 or a 3% total return for the period. If the money was invested for 2 years at the same CAR you would have $106 at the end of the first year and $106 x 1.06 = $112.36 at the end of the second year for a total return of 12.36%.

As you see, if you know the CAR and the period of time involved you can calculate the total return. Notice that the CAR and Total Return are the same at the one-year point. During the first year the CAR is always greater than the Total Return. After one year the Total Return is always greater than the CAR. It is important to understand the difference between these two returns because during the first year they can look very strange and yet be correct.

For instance, suppose you bought a stock and one week later it had gained 2%. The CAR is the rate you would earn if this same gain continued for a year. A 2% gain in one week equates to about a 180% CAR. On the other hand, the Total Return is only 2%. By using an Internal Rate of Return calculation, which takes into account both the time and amounts of money invested, we can calculate an accurate CAR. Here is an explanation of how it is done:

If you go to your local bank and open a savings account, the banker tells you that they will pay you a certain annual percent return on your money, say 6% compounded daily. You agree and deposit a sum in the account. From time to time you may deposit more money or make withdrawals from the account. At any time, you can ask a bank teller what your balance is and they can tell you. They can do so because they have recorded each of the transactions you have made in the account and they know they are paying you at a fixed 6 percent interest rate. Knowing these two factors allows them to calculate the third (your present balance) by adding the proper amount of interest to your balance each day.

The problem is different when you invest in an investment in which the return varies, such as an investment club where the value of the security or members' units change whenever the club is valued. However, like the bank, the Club Accounting program does know two of the three factors needed to calculate the third one.

In this case, the program knows all of the transactions that have been entered into the club and it knows the current balance in the account on the valuation date. What it doesn't know is the compound annual interest rate that would have to be paid on all these transactions to make them total to this current balance. It can calculate this interest rate but must do so by using trial and error to find an interest rate that when applied to the daily account balance will result in the current balance. The CAR rate calculated in this way is called an Internal Rate of Return (IRR). Once the CAR is found, a total return can easily be calculated for any period of time.

A simple example will illustrate the effect of time and dollar amount on the CAR calculation.

Suppose you open a bank account on January 1st and the bank pays you 6% CAR. You deposit $100 to open the account. Then you do nothing with the account until December the 1st when you deposit $200 more. On December 31st you run a valuation statement. The first $100 would have made 6% a year for one year, and grown to $106. The second $200 would have made about $1.00 in interest during the month of December. Therefore, the current value would be $307 and the amount invested or cost is $300. By using the cost and value to calculate the return one would get (7.00/300) x 100 = 2.33%. However, we know that we actually earned 6.0% CAR for the year not 2.33%. The difference is the result of having most of the money invested for only one month. The IRR calculates the true interest rate you earned as 6.0%. The formulas for this calculation are included at the bottom of the page.

As you see, one can't just use the cost of a stock, or the amount paid in by a member along with the current value to calculate the CAR. Every security or member transaction involving money flowing into or out of the club must be considered separately both in time and amount.

Consequently, almost all security and member transactions have an impact on the returns that are calculated. Club Accounting uses the IRR method to calculate the CAR and Total Return for several different combinations of individual and groups of securities, cash, and members transactions. These are shown on the Valuation Statement and Members Status Report.

Mathematical Formulas

The following description is for those readers who have a mathematical background and who want an exact definition of the way total return for each investment period is calculated.

Definition of Variables

Cf(i) Amount of the i-th cash flow transaction during the period. If the transaction by the investor puts money into the investment (member payments or fees, or security purchase), the amount is negative. If the transaction by the investor receives money from the investment (member withdrawals, security sales, cash dividends), the amount is positive. The four cash flows used for the four return calculations are described in the bulleted items in previous section.

N Number of cash flows during the investment period.

V Value of the investment at the end of the investment period.

d(i) Date the i-th cash flow was posted.

D Date of the end of the investment period.

r Estimated annual rate of return.

v Computed value of the investment at the end of the investment period.

The estimated rate of return (r) is varied in the following equation to make the computed value (v) equal to the actual value (V). An iterative procedure is used. The value of r that makes the two value figures equal (v=V) is the actual annual rate of return.

Formulas

v=Sum(cf(i) * (1 + r)^((D - d(i)) / 365.25))

where i = 1 to n and

D - d(i) is the number of days between D and d(i)

Finally, the total return during the investment period is:

Total Return = (1 + r)^((D - d(n)) / 365.25) -1

This article originally appeared in the December 2002 issue of BetterInvesting magazine.

My Club Accounting Maintenance has expired. How do I renew?

A Club Accounting Maintenance Agreement is required for all Club Accounting users. Club Accounting Maintenance entitles your club to free updates to Club Accounting so that you can be sure your program is always current with tax law and loaded with the latest features. This agreement also means that if you have any questions about the software, you can contact us online or by telephone, and we'll answer your question quickly. It is also required for software updates, exporting data, and getting online stock quotes.

Club Accounting Maintenance can be renewed by calling ICLUBcentral at 1-877-334-2582 (1-877-33-ICLUB), or purchased online.

My maintenance is listed as expired, but it is is still in force.

If your club accounting maintenance agreement is listed as expired, there are three possiblities:

1. Your maintenance has expired. Contact Technical Support to double-check and renew.
2. Your record may be in error. Sometimes we get payments, but the club hasn't been named. Again, contact Technical Support to correct your record.
3. You or another member of your club has installed Club Accounting on a second computer, which un-registers the first computer. Please note that Club Accounting is licensed to a Single User for use on a single computer. This same statement is part of the User License and on page one of the manual.

If you want to have multiple copies of the software, there are two options:

1. Purchase a co-Treasurer license from ICLUBcentral at 1-877-334-2582 (1-877-33-ICLUB).
2. Use an unlicensed copy for display purposes only. Do not make any updates to your club's records on the unlicensed copy, because you will not be able to export the data. You can use this copy to show your club your data, but not for entering data.

If you are changing Treasurers, simply give the new Treasurer the software, a backup of the data (FILE > EXPORT), and the serial number for the software. When the new Treasurer installs the software, it will take the license from your installation. Be sure to export the data before the new Treasurer installs the software, or you will not be able to do the export!

How do I change/add a treasurer, or install Club Accounting on a new computer for an existing treasurer?

ADDING A SECOND TREASURER

NOTE: If the club is only changing treasurers, or an existing treasurer is only changing computers, skip down to the section on Setting Up.

Adding a second full-time treasurer in Club Accounting 3 first requires a second license to be purchased. This is a one-time charge, and so long as the second license is used for the same club, it will be covered by the same maintenance agreement as the primary license. The license can be purchased by calling us at 1-877-334-2582. Once the license is purchased, the second treasurer should follow the steps below on Setting Up.

SETTING UP

When setting up a treasurer for the first time, there are three main things they need to get started:

1. The proper serial number.
2. A recent backup.
3. A copy of the club accounting program.

Follow these instructions to take care of all three of these items.

1. THE PROPER SERIAL NUMBER
   
   • The best way to make sure that you have the correct serial number is for the outgoing treasurer to open his or her copy of the Club Accounting program, and write down the serial number which appears on the page with the club name and maintenance date. (If your club is adding a treasurer, Make sure to use the newly purchased second license serial number, instead.)
   • If for any reason the program is not operating correctly, the serial number can also be found on the back of the plastic case the program originally came in, or can be looked up by one of our support staff. You can contact support by filling in a support request at http://www.iclub.com/support/default.asp, or by calling us at 1-877-334-2582.
2. A RECENT BACKUP
   

   NOTE: These steps assume Club accounting is working correctly; if not, please contact support for help in getting your information.

   • In Club Accounting, go to the File menu, and choose EXPORT.
   • On the Export window, click BROWSE
   • On the Browse For Folder window, we suggest to select DESKTOP.
     NOTE: If you have a removable drive plugged into the computer, you can certainly select Computer, and then the removable drive.
   • Once you have the location selected, Click OK to Return to the Export Data window.
   • Click OK to Export the data, and OK again to return to the Club Accounting program. When this is complete, you can close Club Accounting
     NOTE: Every backup file contains all of your club information, so you do not need to save multiple copies.

   Once you have the backup file, you will need to get it to the new treasurer. The files are small enough that they can be sent through email, or saved on to any number of disks. If you are not sure how to do this, please check the built in help files for windows, or your email program.

3. A COPY OF CLUB ACCOUNTING
   

   NOTE: Club Accounting requires an internet connection at least during registration; make sure one is available.

   While you can install Club Accounting from a CD, we suggest whenever possible to download and install the most recent version from our web site at http://www.iclub.com/support/downloads.asp.

   Install the program using the following steps:
   

   • In your web browser, go to http://www.iclub.com/support/downloads.asp
   • Click on DOWNLOAD next to the CLUB ACCOUNTING icon.
   • Fill in the information on the next page, and then click the DOWNLOAD button.
   • Click SAVE FILE (Firefox) or SAVE (Internet Explorer)
   • Select DESKTOP for the save directory (you may need to click SAVE again to confirm the Desktop after selecting it.)
   • When the download is complete, close your web browser and double-click on the installation file on your desktop.
   • Follow the on-screen installation instructions.

   NOTE: If for any reason you need to install from a CD, make sure the label shows at least version 3.1; earlier version 3 CDs cannot be fully updated without installing the full version 3.1 program. If you do install from a CD, you will need to make sure that Club Accounting is registered, and fully up to date before attempting to import any backup files.

   If you are using Windows Vista or Windows 7, there are a few extra steps you need to take in order to get club accounting working. Make sure to take these steps before you open Club Accounting and try to register.
   

   • With the program closed, click the WINDOWS button in the lower left corner of your screen.
   • Go to COMPUTER > C:\ > PROGRAM FILES > ICLUBcentral > CLUB ACCOUNTING 3
   • Once inside the Club Accounting 3 folder, right-click on the Club Accounting 3 program icon (it will have the same green visor on a yellow and blue back ground as the shortcut that appears on the desktop or Start menu), then click PROPERTIES.
   • On the properties window, click the COMPATIBILITY tab.
   • On this tab, click RUN THIS PROGRAM IN COMPATIBILITY MODE.
   • Make sure the selection under this shows Windows XP (Service Pack2)
   • Also on this tab, click RUN THIS PROGRAM AS ADMINISTRATOR.
   • Click APPLY, then OK.
   • If you have the User Account Control (also called UAC) active, Windows will now ask you to Cancel or Allow the program when you open it. Click ALLOW to let the program run as normal.

   Once you have Club Accounting installed, and set for Windows Vista or Windows 7 (if required), open the program. The first thing will be to enter the club name. While it is possible to change the name latter, the process can be tricky; double check your typing before clicking OK. When asked for the serial number, go ahead and enter either the serial number for the outgoing treasurer, or the second license serial number if the club is adding a second treasurer. From here, follow the steps to import the backup file made earlier.

   NOTE: If after registering, Club Accounting does not show the correct maintenance, contact ICLUB support to correct the issue.

I received a "serious error" message when attempting to import my data.

This error appears when you are trying to import data from a later version of Club Accounting than the version installed on your system. For example, if you have just installed the Club Accounting software off the CD and you have a data disk from your previous Treasurer who updated their software to the latest version, you may get this error. The fix is simple: upgrade your software to the latest version of Club Accounting.

If you have already installed CA3, select HELP > CHECK FOR UPDATES.

If you have not, install the latest version directly from our web site.

I am unable to register the software or or receive an error: "Could not connect to the registration server. Please temporarily disable your internet firewall or try again later."

The answer to this problem is in two parts, the quick fix and the permanent solution. For the quick fix, you can disable your firewall temporarily. For the permanent solution, you will need to contact your firewall vendor to permanently allow connections to iclub.com. Tell the vendor, "I have a program that goes to the internet to register and [Norton Internet Security/Zone Alarm/etc] is blocking it. Please help me set up an exception so it is no longer blocked."

Listed below will be instructions for disabling popular security software. At the bottom will be additional instructions if you are using Windows Vista.

Windows XP built-in firewall

1. Open your Control Panels and select the Security Center control Panel.
2. Scroll to the bottom, and click on "Manage settings for Windows Firewall".
3. Place the check in "Off (Not recommended)."

For the permanent solution, contact Microsoft.

Norton Internet Security or Norton Personal Firewall

1. Open NIS or NPF by double-clicking the icon on your desktop.
2. Click INTERNET STATUS.
3. Click CURRENT STATUS.
4. To disable NIS or NPF, click the DISABLE button. To enable NIS or NPF, click the ENABLE button.

For the permanent solution, contact Symantec.

McAfee Personal Firewall

1. Click Stop McAfee Firewall to disable the software.
2. From the Welcome to McAfee Firewall screen, go to the Network Control Settings and select Allow All Traffic.
3. This works for most versions of the McAfee firewall. However, there are many versions, each with different steps to disable. You may need to contact McAfee directly if this does not apply.

For the permanent solution, contact McAfee./P>

Zone Alarm

1. Right-click the Zone Alarm icon in the System Tray, and select Shutdown Zone Alarm.

For the permanent solution, contact ZoneAlarm.

Earthlink Accelerator

1. Right-click the Earthlink Accelerator icon on the system tray next to the clock in the lower-right corner of your screen.
2. Select Disable Earthlink Accelerator.

For the permanent solution, contact Earthlink.

Other Web Accelerators

While the Earthlink Accelerator is one of the more popular accelerator programs, the number of web accelerator programs available for free on the internet, or packaged with other software grows every day. If you are using a dial-up connection, you should check your computer for this sort of software. Most accelerators will show up in one of three places:

1. As part of a toolbar on your web browser.
   Even if your web browser is not active, the accelerator can still be running, so make sure to start your web browser and double-check.
2. In the lower right-hand corner of your computer screen, with other running programs.
   For Windows XP users, make sure to click SHOW HIDDEN ICONS to make sure that all programs show up.
3. In the list of installed programs in the START menu.

You should check all three of these places, as there is nothing to stop your computer from having more than one of this type of program installed. If you find anything with the word ACCELERATOR or WEB in the name in any of those three places, double-check if it is a web accelerator program. If it is, try disabling it and then using your program again.

Spybot

1. Open Spybot.
2. If you have a shortcut on your desktop, double click it. or Click Start, then All Programs, then Spybot - Search & Destroy and then Spybot - Search & Destroy.
3. On the left side, click Immunize.
   NOTE: You will see 2 items that need to be turned off. The 1st item is the "bad products" that are being blocked. The second item is the Blocker Helper.
4. At the top of the screen, click the Undo button. This will allow all bad products again.
5. In the Browser Helper section, un-check the Enable permanent blocking of bad addresses in Internet Explorer box.
6. From the File menu choose Exit.

NOTE: Spybot is now temporarily disabled. For the permanent solution, contact Spybot.

Windows Vista

We have found that the following set of steps can be very useful in getting our software to work correctly with Windows Vista. If you are running into trouble with registering the program, connecting to the internet or saving information, please take these steps, and try the program again.

• With the program closed, click the WINDOWS button in the lower left corner of your screen.
• Go to COMPUTER > C:\ > PROGRAM FILES > ICLUBcentral > CLUB ACCOUNTING 3
• Once inside the Club Accounting 3 folder, right-click on the Club Accounting 3 icon, then click PROPERTIES.
• On the properties window, click the COMPATIBILITY tab.
• On this tab, click RUN THIS PROGRAM IN COMPATIBILITY MODE.
• Make sure the selection under this shows Windows XP (Service Pack2)
• Also on this tab, click RUN THIS PROGRAM AS ADMINISTRATOR.
• Click APPLY, then OK.
• If this is successful, Windows will add a small multi-colored shield to the program icon.
• If you have the User Account Control (also called UAC) active, Windows will now ask you to Cancel or Allow the program when you open it. Click ALLOW to let the program run as normal.

How do I disband our investment club?

Users of the Investment Club Tax Printer programs for Club Accounting 3 or myICLUB.com are able to generate what is known as a "short-year" final parntership return. If the club disbands during a year (instead of at the end of a year), the previous year's Club Tax Printer can be used to create final partnership tax forms. Once you have followed the disbanding directions below, run the Tax Printer. It will detect that the club has dissolved, and will prepare final returns for the period starting January 1, of the year the club is disbanding, and ending with the date that operations ceased. If the program does not ask if you want to run a short-year return, or if it merely regenerates the prior year's forms, it is likely that you still have securities or cash still on the books. All accounts must be zeroed out before you can generate a short-year return. Note: You will have to manually insert the beginning and ending dates on all schedules produced by the Tax Printer.

NOTE: While there is not a specific date during the year when the prior year's forms can no longer be used, there are some guidelines set by the Internal Revenue Service about partnerships that consider closing before the end of a year. IF THE CURRENT TAX YEAR FORMS ARE AVAILABLE BY THE DEADLINE TO FILE THE SHORT-YEAR RETURN, A PARTNERSHIP IS REQUIRED TO USE THE CURRENT YEAR YEAR FORMS.

Our accounting advisor offers the following advice on what this means for clubs:

• If a club disbands in December, their deadline is April 15 of the following year. Tax forms should always be available by then so these clubs should always wait to use the new year forms.
• A November dissolution has a deadline of March 15. Forms are usually ready by mid January to early February. These clubs should wait for the new year forms to file their returns.
• An October dissolution has a deadline of February 15. Most years forms will be available by this date. If large tax law changes are enacted, forms may not be available by February 15. While this is uncommon, it has happened in the past.

Based on this, we recommend that clubs considering disbanding in the last quarter should wait until the new year to file, and use the forms for the appropriate year. To be safe, those dissolving in October can file for a five-month extension using Form 7004 in the event that Form 1065 is not ready by February 15.

Two other things to keep in mind:

1. File in a timely manner. It is better to file on time and later make a correction if necesary than to file late and hope nobody notices.
2. If the tax law changes, a dissolving partnership must follow the law in effect for the year they dissolve no matter which forms they use. For example, a club dissolving in April 2011 would need to use 2011 tax law regulations even if using the 2010 forms. Significant law changes can be a problem for customers using the previous year tax printer to file their final return. This is because that tax printer will not include the tax law changes needed to file an accurate return for the following year.

One recent example is the split of dividends into qualifying and non-qualifying. Long-standing clubs may remember when capital gains were dividend into three categories (long-term, medium-term and short-term) and a year or so later back to the current two categories. In those cases, the previous year's tax printer would not produce an accurate final return for a dissolved club on the previous year's forms.

Before completing a short year return, be sure that you have have received all income from your club's holdings (especially any dividends, or account interest). If you do not, you may end up getting a dividend or other income after you've already disbanded the club and handed out the checks. If this happens, you may have to re-do the entire process of disbanding the club, changing how much you paid each partner, and refile your final return.

Your club is officially disbanded when you write the checks and all accounts are completely closed, not when the vote takes place.

Keeping the above information in mind, there are two ways to dissolve the club and distribute the proceeds among club members; the "Cash Only" method and the "Cash and Stock Transfer" method. If there are gains on some of your unsold shares, there may be tax advantages to the Cash and Stock Transfer method; please consult your tax adviser. Please be advised that after you disband your club, the Internal Revenue Service requires you to file your final tax return by the 15th day of the 4th month after operations have ceased. The return will cover the period from the start of the year up to the date that operations ceased.

Regardless of the method your club uses, we strongly suggest to print copies of the following reports for your records:

• The withdrawal distribution report for each member.
• A copy of the valuation statement that was used to disband the club.
• A copy of the Income and Expense report and the Balance Sheet.
• A copy of the Transaction Report for the entire year to date.
• A copy of each member's Individual Valuation Units Ledger from the time each member joined the club.
• A copy of the Security Transactions History report for each stock that you sold or distributed to members.

I. Cash Only Withdrawals Method

1. Sell all Securities.
2. Enter all "Sell" transactions into Club Accounting.
3. Record all final/closing expenses.
4. Enter a valuation for the day after all sells and final/closing expenses have been entered.
5. Print a Member Status Report on the last valuation date.
6. Withdraw all members one day after the last valuation date. Do not charge any withdrawal fees. You can use the same date for announcement and payout.
7. Print the Withdrawal Distribution Reports.

II. Cash and Stock Transfer Withdrawals Method

1. Sell all Securities that are not to be transferred.
2. Enter all "Sell" transactions into Club Accounting for those Securities sold.
3. Record all final/closing expenses.
4. Enter a New Valuation. Use a date after the last sell transactions were entered.
5. Print a Members Status Report for the valuation date in Step 4.
6. Withdraw all members who are receiving CASH ONLY after the valuation date in step 4. Do NOT charge any withdrawal fees. These withdrawals can all have the same date, which should be one day later than the last valuation. The announcement date and payout date should be the same.
7. Enter any "Stock" withdrawals after all "Cash Only" withdrawals are entered.
8. Club accounting (all versions) will not accept two stock withdrawals on the same day, therefore each withdrawal with a stock transfer must be entered on a different date. Enter the first stock withdrawal on the date after the valuation date.
   Note: previous instructions indicated that a new valuation should be produced for each member withdrawal using stock. This is no longer true.
9. Enter the next stock withdrawal. Date the withdrawal for the next day. Again, announcement and payout dates will be the same.
10. Continue until the last withdrawal is entered, then print Withdrawal Distribution Reports.

If the club uses the Tax Printer software, and you have followed the NOTE at the beginning of this email, print the club's 1065 and K-1's for all the members for the final year, using the Tax Printer for the prior year. Make sure to check the "final return" box on Form 1065 manually.