How does the club pay taxes?

The club itself does not pay Federal Taxes. Investment clubs file IRS form 1065 which is an informational IRS form, along with IRS forms K, K-1, Schedule D, and L, M and N if necessary. This passes the tax liability from the club to the individual members who each receive IRS form K-1 from the club treasurer. The individual members will then have the information to be able to report their club portion of the club income, expense and capital gains/losses on their own 1040 returns.

Unless an extension has been filed, all forms must be submitted to the IRS before March 15th.