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Club Tax Printer Update
ICLUBcentral is pleased to announce that the first round of forms in our 2008 Club State Tax Printer have been sent off to the various states for review, and Minnesota and Arizona have already confirmed that our forms comply with their standards! In the coming weeks, our software engineers will be hard at work finalizing our Tax Printer software with the remaining twelve states in our '08 lineup: California, Colorado, Georgia, Iowa, Maryland, Massachusetts, Missouri, New Jersey, New York, Pennsylvania, and Wisconsin, as well as, new this year, Indiana!
Remember: ICLUBcentral is the only provider of investment club accounting tools whose replacement state tax forms are approved by each state for which we provide them! As a member of the National Association of Computerized Tax Processors, we work with each of the 14 states for which we offer the Club State Tax Printer to ensure that your club's filings are accepted without delay.
We're also on track with ICLUBcentral's 2008 Club Federal Tax Printer for Club Accounting 3 and Club Accounting Online at myiclub.com. Our programming work on the 2008 Club Federal Tax Printer is also completed, and the program is in the testing phase. Upon successful completion of testing, the Club Federal Tax Printer will be ready for release right around New Year's Day 2009! Check www.iclub.com for the current status of both Federal and State Tax Printers.
At the home office in Cambridge, MA, the phone lines in our Customer Support offices have been ringing off the hook all week with folks pre-ordering their 2008 Club Tax Printers, upgrading to the new Toolkit 6, and renewing their StockCentral.com memberships (for maximum discounts on the tax printers and Toolkit 6). Average hold times are up to three-and-a-half minutes for callers this week (which is still pretty terrific), but if that exceeds your personal phone-call-hold-time limit, just order online. You can load up your shopping cart with most of your year-end upgrades, renewals, and tax printers in one online transaction, and pay by check or credit card for most items!
Even better, if you pre-order the 2008 Club Tax Printers by 12/31/08, you'll be protected from future price increases. Learn how save $30 and purchase your Club Tax Printers for only $59.99 each!
People Are Talking About...
We've been so encouraged by the response that we've received from investors about our free online webinars! It seems that attendees can't stop talking about how valuable they're finding the workshops in understanding how to use ICLUBcentral's tools and programs. Here are just a handful of the comments that attendees have made about our recent webinars:
- The screener webinar was my first visit to on-line education, and I enjoyed it more than if I attended a regular class. Doug was prepared and the screener itself is more powerful than I realized even though I have tinkered with it several times. This particular screener will be part of my future decision making process. Thanks, Doug.
- Ed Chiampi
- I totally enjoyed the Webinar and learned much. It took away some of my fears and opened up a whole new vista of the potential for the program. To hear Doug in person was awesome, and very motivational! Thank you.
- Don Park
- Doug did an excellent job on the webinar. I am looking forward to the next one. We have available to us some very useful tools. Now, we just have to use them! Thank you.
- John Blankenberg
- The Webinar on StockCentral features was super. I really learned a lot more about navigating the site and finding "jewels of wisdom" to use whether searching for new stocks or reviewing present holdings. Tools such as this are critical to ordinary investors considering the volatility and nightmares on Wall Street.
- Bonnie MacPherson
- Thank you for allowing me to be part of your meeting last night. I was impressed, not only with being able to do a presentation on the web -- I love it! -- but also with Stock Central. I had no idea that there was so much there.
- Pat Munn
Join the hundreds of investors who are interactively learning online with ICLUBcentral's investing and club experts. Upcoming sessions include:
Missed a session? Not to worry, we are recording each session so you can review and share them after they happen. Currently we have the following webinars available at your convenience:
We look forward to seeing you online. See the complete schedule of upcoming webinars and register today!
Join the Club!
by Amy Rauch Neilson
All investment club partnerships are created equal, right? Well, sort of. They may start out that way, but for a number of reasons, they likely won't -- and shouldn't -- stay that way.
Believe it or not, that's not just OK - it's preferable. "The notion of equal partners is more illusion than reality," notes Herb Barnett, who is currently the treasurer of three investment clubs. "It's a pie-in-the-sky idea that sounds good at the time that a club is organizing, but one that truly isn't practical in the long run.
"A lot of clubs, when they get started, form under the premise of – 'Hey, we're all friends and we want everyone to be an equal partner,'" he says. "Members believe everyone should contribute the same amount of money and that will enable the club to avoid any fancy bookkeeping. But there are some definite traps to that philosophy."
Unequal -- yet fair
Though it sounds like the logical way to go, the equal-share system actually presents a number of problems. Perhaps the most obvious drawback is that, as a club's portfolio grows, it can become difficult -- if not nearly impossible -- for new members to "buy in" to the club. "It's a little awkward to tell a prospective member that he or she needs to write a check for $20,000 in order to buy into the club as an equal member."
Allocating Club Income and Expenses at Year-End
by Daniel Abraham, VP of Customer Care
Because there was a confusing process for Distribution in the past, Treasurers became used to distributing units at the end of the year, even if they didn't understand why they were doing it. To remove confusion, we changed the name to "Allocation of Income and Expense", removing the term "Distribution" entirely.
The short form is that units should not be distributed at the end of the year. This is a change from how it may have been recorded in the past. Now it's much simpler, and it's proper accounting to boot.
Now for the history. In the past, both the number of units owned and unit value changed at the end of the year, after running a Distribution of Earnings. This practice started before computerized accounting programs with the accounting manual put out by NAIC/BetterInvesting for investment clubs. It was not a well thought out procedure and has caused nothing but confusion since.
The idea was to mimic mutual funds, who pay out all their earnings annually, and whose shareholders (mostly) reinvest those earnings back in the fund. Unlike mutual funds however, Investment clubs, do not have to pay their earnings out each year. Moreover, the members are taxed on those earnings whether paid out or not.
So, in their attempt to mimic mutual funds, the software caused additional units to be 'distributed' to each member. But then, because a member's value does not change simply because taxable income has been allocated, they were forced to make an offsetting adjustment to the unit price. In the end, members ended up with more units, which were worth less per unit, and exactly the same total value as before!
This was a needlessly confusing exercise. There were other adverse ramifications. If the club suffered a loss for the year, units were taken away. Also, it was confusing to have the unit value of the club go down, when the club had experienced earnings for the year.
Should you want to change how units and unit value are handled at the end of the year, the settings are available:
Club Accounting Online
Go to Utilities > Allocation Settings
On the second item, the pull-down menu lists the year you would like to start using the new, simpler allocation method instead of the old, confusing distribution method. Change that to the tax year you're running the distribution for. For example, this year, change it to 2008.
Re-run your Allocation of Income and Expense by selecting Utilities > Allocate Income And Expenses. Select 2008 for the year, then click Yes.
Club Accounting 3 for the Desktop
Go to TOOLS > SETTINGS
Go to "Do Not Distribute Units at End of Year Starting from" and select 2008, if it is set to a date in the future.
Re-run your Allocation of Income and Expense by selecting Tools > Allocate Income And Expenses. Select 2008 for the year, then click OK.
December 11, 2008
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From our World Headquarters in the historic College House building in the heart of Cambridge's Harvard Square, we develop high-quality software products and web services for individual fundamental investors, and powerful accounting tools used by the majority of US investment clubs.
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Investor Advisory Service
12/23: Webinar: Preparing for Club Tax Season
1/6/09: Webinar: Improving your Portfolio with Investor Advisory Service
1/20/09: Webinar: Preparing your Club's Taxes
1/24/09: StockCentral Investor Education Workshop; Minneapolis, MN.
2/4 - 2/7/09: World Money Show, Orlando, FL; ICLUBcentral and StockCentral, Exhibitors.
2/10/09: Webinar: Go Offense! Go Defense! When to Buy, Sell, or Hold with Toolkit 6
2/14/09: Club Accounting Workshop and Club Portfolio Clinic, Menasha, WI; Doug Gerlach, Presenter.
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Like 7-Eleven, we're not always doing business, but we're always open -- visit the ICLUB Store and outfit yourself with the simple, yet powerful tools and services that smart investors have been using to grow their portfolios since 1989.
Got a Problem?
Support is here to help. You can reach them M-F, 9:30 AM--6:00 PM at 877-33-ICLUB (877-334-2582), or use the email web form at ICLUB Support.