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May 22, 2012 -

In This Issue:

One Year Ago in IAS: Abbott Labs

In the May 2011 issue of the Investor Advisory Service we recommended Abbott Labs, a maker of a broad line of health care products and pharmaceuticals. This large company had revenues in 2010 of $35.1 billion and had grown earnings per share at an annualized rate of more than 8% since 2001. How have the company and its stock performed in the year since it was recommended?


Mechanics of Performing a Withdrawal
by Sean Pulrang
ICLUBcentral Customer Support Specialist

Similar to my last post, I may find myself preaching to the choir, but I've had several questions this week revolving around the basic steps of performing a withdrawal in club accounting. As such, I'm posting up this note as a bit of a refresher. There are three sections:

  1. Guidelines common to both the desktop and online accounting.
  2. The basic steps for desktop Club Accounting
  3. The basic steps for online accounting. 


Zero-Sum Gain: Profit Is Reported on a Loss
by Russell Malley
Club Accounting Adviser for ICLUBcentral Inc.

I received a question regarding a large capital gain reported on the Schedule K-1 of a withdrawn club member. The member had a loss on his investment in the club. So why is there a capital gain reported?

The answer lies in the purpose of the K-1. The K-1 reports a partner’s share of club income and expenses for the tax year. It doesn’t report the gain or loss from liquidating a partnership position.

In this case the club had disbanded. All stocks were sold, generating a large capital gain in the current tax year. This member hadn’t withdrawn before the gains were realized by the club. So members were allocated their share of the club’s capital gains. It was this gain that was reported on their K-1. The deciding factor in allocating gains is being a partner when the gains are realized. It doesn’t matter whether all the stock was purchased before someone became a member. As long as you were a member when the gains were realized, you’ll be allocated a share of the gains at year-end. This applies to all income and expense items, not just to capital gains.    


May 22, 2012


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Events Calendar:
First Tuesday of each Month: Toolkit 6 User Group led by Doug Gerlach, ICLUBcentral Inc.

Third Tuesday of each Month: New Investment Club Orientation led by Doug Gerlach, ICLUBcentral Inc.

Doug Gerlach will also be speaking at the following events:

June 5, 2012: Toolkit 6 User Group Webinar; Live Stock Study using Toolkit 6
Doug Gerlach, Speaker

June 7, 2012: Retail Investors Conferences; Doug Gerlach, Speaker

June 19, 2012: Investment Club Operations Webinar; Handling Investment Club Member Withdrawals
Doug Gerlach, Speaker

July 3, 2012: Toolkit 6 User Group Webinar; Diving Into Dividends in Toolkit 6
Doug Gerlach, Speaker

July 12, 2012: Retail Investors Conferences; Doug Gerlach, Speaker

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