|In This Issue:
Free Club Webinar on Closing the Books at Year-End
On Tuesday, December 21, 2010, at 9:00 PM Eastern Time, ICLUBcentral's Doug Gerlach will present a free webinar on "Closing the Club's Books and Preparing for Tax Season."
If you're a new investment club treasurer, you won't want to miss this informative session. Doug will review proper procedures for reconciling the club's books, convening an Audit Committee, and verifying that all necessary settings have been selected in your Club Accounting 3 or myICLUB.com programs.
By following the practices that Doug lays out in this webinar, you'll be ready to generate your club's tax returns when the time comes in 2011.
Sign Up for the Free Investment Club Webinar today, and join Doug next week at this educational event!
Improvements Coming to StockCentral Data Service
by Doug Gerlach
Next week, we'll be making some improvements to the stock data used on StockCentral to provide some additional information and enhance some existing data points. We will continue to use data provided by Morningstar as we have been using, although some of the changes listed below are due to some changes within Morningstar with regards to the back-end systems that deliver underlying data to us.
The industry and sector classifications will change slightly. Morningstar has remapped its sector and industry groupings to match more closely the S&P GICS categories. You will see these changes in the Sector/Industry Browser on the site, as well as in any company-related data. You'll probably notice right away that Real Estate is a new sector; those companies were previously included in the Financials sector.
We are replacing Cash Flow per Share in the data with Free Cash Flow per Share. Free Cash Flow removes any capital expenditures from the calculations and is preferred by many investors when evaluating a company's financial statements.
We are adding long-term analyst consensus estimates (ACE) of EPS growth rates.
We are also adding data for Canadian companies from the Toronto Stock Exchange and Toronto Venture Exchange.
After the change is implemented, we expect that quarterly and annual data will be available much sooner than before. We will continue to report only finalized data (after a company reports results to the SEC), but changes in Morningstar's infrastructure will get updates to us much more quickly.
What does this mean for your Toolkit 6 software?
Does My Investment Club Have to File a Tax Return?
Many new clubs often ask "Does my investment club have to file a tax return with the IRS?"
The answer is "Absolutely!"
While investment clubs that are formed as general partnerships do not have to pay taxes directly to the IRS, every investment club must file an informational return with the Internal Revenue Service. It doesn't matter how new your club is, whether or not you had any income during the year, whether or not you bought or sold any securities — you must still file the appropriate forms with the IRS.
To file your club's Federal tax returns with the IRS, you'll need to complete three different kinds of forms:
Form 1065 is used by General Partnerships (like your investment club) to file their taxes with the IRS. It's what is called a "pass-though" document — it allows the liabilities of the total tax due to be "passed-through" to the members of the partnership.
Schedule D is part of Form 1065 and covers the Capital Gains and Losses for your club.
Schedule K-1 is an individualized report specific to each member of your club covering their individual share of the tax liability. Each member receives their own Schedule K-1 which they must submit to the IRS with their personal tax returns.
ICLUBcentral's Federal Club Tax Printer software includes all sections of Form 1065, and allows you to print out a Schedule K-1 for each member of your club. There's no easier way to prepare your club tax returns — order your Club Tax Printer before December 31 to receive special early bird pricing!