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November 2, 2004 -
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ICLUB Insider November 2, 2004


NAIC Online Club Accounting Just Got Better

With the latest version of NAIC Online Club Accounting (NOCA), we have made many changes and improvements designed to alleviate common accounting problems. Here are a few of the most notable features:

  • If there are any data file errors when importing data from NAIC Club Accounting version 1 (NCA 1), NCA 2, or older versions of NOCA, NOCA automatically corrects the data upon import, or the data file errors are clearly identified to the end user with guidelines on how to correct the problem.
  • We've improved the way that the software handles transactions, valuations, or distributions that are entered on the same date.
  • NOCA makes use of two-step withdrawals, which is a more rational way to treat member withdrawals.
  • The option for the merger/spin-off return to be based on tax basis rather than market value from "action" date is now included. You can find this option under Accounting > Utilities > Update Club Settings.
  • Total Return has been removed in favor of the more meaningful Compound Annual Return (CAR) calculation.
  • There is an option for CAR calculation on repurchased securities to not include earlier ownership of the same security. Go to Accounting > Utilities > Update Club Settings to select the method that you prefer to use.
  • Cases where rounding errors could potentially occur have been corrected.
  • The return on capital treatment has been improved.

Also note that as a result of these fixes, a few errors in previous entries entered in your books may come to light. If you see a stock or member reappear in your records with a small fraction of shares owned, delete the original transaction and re-enter it. This will take care of the discrepancy.

Loyal NOCA users and NOCA newcomers will undoubtedly find that these improvements make club accounting much easier and much more intuitive. All of us at ICLUBcentral sincerely thank current users for choosing NAIC Online Club Accounting.

If your club is not already using NOCA, then we invite you to start using it. Or sign up today for a free 60-day NOCA trial, with no strings attached.

For more information about NAIC Online Club Accounting, please visit:

Club Accounting Support Matters Now More Than Ever
Gearing Up for Tax Season

It won't be long before club treasurers will turn their attention to filing their club's federal (and state, if required) tax forms. Here's a checklist of items to remember so that you can be well-prepared when it comes time to file.

As soon as 2005 rolls around, you should be on the lookout in the mail for the year-end statements and Form 1099s that all of your financial institutions must send you, reporting interest, dividends and other income paid to you throughout the year. Also remember that dividends that are reinvested are still reported as income.

Form 1099s should arrive by the end of January; make sure to keep them in a safe place so that you'll have them available when you begin preparing your tax filings. Some institutions now make these forms available electronically on their web site, either instead or in addition to mailed copies. Note that institutions are not required to send you a 1099-DIV or 1099-INT for amounts below $10 (though many do), so you may not necessarily receive 1099s for all of your accounts. You are still required to report these amounts to the IRS, however; your year-end account statement will generally include a complete summary of all of these income items.

Once these forms arrive, you can check the amounts shown on the forms to the totals entered in your NAIC Club Accounting software. If you spot any discrepancies, use your monthly and year-end statements to find the reasons for the differences. Usually, this kind of problem is due to a transaction that was mis-entered or not entered at all in your club's books. Last year, a record number of brokerage firms and financial institutions had to issue revised Form 1099s because of the changes to the tax code (primarily due to the establishment of qualifying dividends that were subject to a lower tax rate). This year, financial institutions have had plenty of time to make sure that they're reporting dividends correctly, but there's always the chance that a problem is with your broker's tax documents and not with the club accounting software or your recordkeeping.

Also, don't let the 2004 tax season sneak up on you without first making sure you have renewed your NAIC Club Accounting Support contract. Remember the last year's significant tax law changes? While those aren't likely to be a problem this year, it's a good idea to have Support in your corner anyway. Don't be caught off guard! Stay prepared -- and renew today!

Whether or not tax law changes, our research shows that a majority of clubs use Support over the course of their Support subscription, especially during tax season. At some point during the upcoming tax season you will probably have a question or two that our expert Support team can easily help you with. Remember that your Support contract covers full access to our Support team, including access to our online support pages, personalized email support, and telephone support just a call away. Also remember that the only way to receive software updates and stock quote downloads is by having a valid Support contract.

To renew your Club Accounting Support, please visit:

Stock Analyst Plus Officially Retires

With the introduction of NAIC Stock Analyst 3 (NSA) last year, Stock Analyst Plus (also known as STB Stock Analyst Plus) was superseded by a powerful new version of the program. Completely rewritten from the ground up, NAIC Stock Analyst provides most of the same advanced investing techniques included in Stock Analyst Plus, as well as interoperability with NAIC's Online Premium Services and powerful portfolio management reports.

As a result, the time has come to retire Stock Analyst Plus to greener pastures. As of December 31, 2004, Stock Analyst Plus will no longer be supported by ICLUBcentral Inc. After this date, our support staff will no longer be able to help you with any questions or problems you may experience with Stock Analyst Plus. (You may choose to continue using Stock Analyst Plus, of course, but keep in mind that we will be unable to assist you with any issues regarding the software after December 31, 2004.)

We urge all users of Stock Analyst Plus to upgrade to NAIC Stock Analyst to take advantage of the new features that are part of that program, including the new annual report spreadsheet, customizable logarithmic trend graph with 26 metrics to choose from and direct connection to NAIC's Onlline Premium Services for downloads and updates of SSG data.

To upgrade to NAIC Stock Analyst 3, or to download a demo to test out the awesome power of NSA 3, please visit:

2004 IRS K-1 Form Has Changed Significantly!
Club Tax Printers on the Way

Don't be caught off guard this tax season by the significant changes that the IRS has made to the Schedule K-1. The Form 1041 (Schedule K-1) Partner's Share of Income, Deductions, Credits, etc. (or simply, the "K-1") must be submitted for each individual member of an investment club. The entire format of the K-1 is different this year -- the names, numbers, and layout of various sections have all changed.

We just wanted to make you aware of this fact, and also remind you that the NAIC Club Tax Printers are coming soon. The 2004 NAIC Club Tax Printer (Federal tax software for your desktop NAIC Club Accounting software) will include everything you need to fill out the new K-1's for each member along with the Form 1065 (including Schedule D and supporting schedules) for your club. Look for an ICLUB Insider newsletter announcement in the near future telling you when, where, and how you can purchase the NAIC Club Tax Printers. Don't forget that we also have the NAIC Club State Tax Printer for a select number of states, as well as the NAIC Online Tax Printer to print your federal tax forms (also including the new K-1's) if your club uses NAIC Online Club Accounting rather than the desktop software.

So to get ready for the 2004 tax season, keep an eye out for the NAIC Tax Printers! Don't forget that there are significant discounts to be had for NAIC members who purchase before January 1, 2005.

Look for our Tax Printer ad in the December issue of Better Investing magazine, and watch for an announcement of product availability at:

Let Take Stock Help Your Club Invest More Successfully
by Douglas Gerlach,
VP of NAIC Products, ICLUBcentral Inc.

For absolute beginners, NAIC Take Stock is, without a doubt, the easiest way to become indoctrinated into NAIC's investment methods. With just a few simple clicks of the mouse, NAIC Take Stock retrieves company data from the Internet and carries out a powerful series of computerized calculations to determine if a stock is a reasonable candidate for your portfolio -- or if you should run (as quickly as possible) in the opposite direction!

But NAIC Take Stock isn't just a tool for investing neophytes. I recently heard from an investment club that has found a way to incorporate NAIC Take Stock's logic into every stock considered by its members, and I thought that I'd share their process with other investment clubs in this issue of the ICLUB Insider.

As is common with most investment clubs, the members of this club present stocks on a regular basis for consideration to be added to the club's portfolio. Most of the members use SSG software to develop projections for the company's future growth and to determine if the stock is selling at a reasonable current price. At each meeting, SSGs are passed around the table, and members discuss the attributes and potential of each company. Stocks that meet the basic criteria established by the club (the same standards recommended by NAIC) are only then considered for purchase by the club.

However, this club applies another test to all SSGs created by club members. Each stock is then reviewed by one of its members who owns a copy of NAIC Take Stock, and the resulting SSG is compared to the SSG created by the club member. In a matter of moments, the club has an instant comparison by which they can compare the judgment of the member to the judgment of NAIC Take Stock. If NAIC Take Stock agrees with the member's judgment, then the company is deemed to have passed the litmus test of being a quality stock. If the results of the SSG generated by NAIC Take Stock are wildly divergent from the member's analysis, then the stock is sent back down the minor leagues (if this baseball metaphor seems way off base, so to speak, then just think of this as sending the stock back to the member for further review).

This doesn't mean that the club necessarily used NAIC Take Stock to make their investment decisions for them. The technology of NAIC Take Stock has merely provided another tool to aid in the stock selection process. They still review companies, do intensive research and thoroughly investigate every possible opportunity. But NAIC Take Stock helps the club to identify problems that may have been less obvious, or to flag overly-optimistic user expectations of future growth.

This technique is simple enough to be used by every club when examining a stock, serving as a double-check of member SSGs (particularly for clubs with new members who aren't fully up to speed on the SSG) and as a catalyst for discussion about what makes a high-quality growth stock that will be a worthy addition to the club's portfolio.

At just $99 (for NAIC members), perhaps you should think of NAIC Take Stock as a bit of insurance that your club is using NAIC's tools appropriately. If NAIC Take Stock helps your club to avoid buying just one stock that isn't likely to live up to your expectations, won't that be $99 well spent?

For more information on NAIC Take Stock, or to download a demo, please visit:

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