Desktop Accounting - Transfer units between family members (gifting units)

Gifting Units in Desktop Club Accounting:

Before proceeding with the steps below, please check your state's laws for gifts to determine if such gifts are limited to a certain cash value, limited to family members, or are subject to other restrictions.

Note: Be wary of giving units to people who are not prepared to contribute to the club as fully-participating members. By receiving units, they become members of the club and the partnership structure.

For these steps, we make the following assumptions (as an example):

  1. The present listing is under the social security number (SSN) for member A.
  2. There will be a 50/50 split in the units between member A and B. You can use other percentages if need be, but 50/50 is easy to figure out for this example.
  3. The split is not happening at the very start of a year; and the split will require figuring out how much of the current income/loss to apply to each member.

In Addition to the steps below, we also have a simple spreadsheet, which you can use to help keep track of the figures needed when transferring units. The spreadsheet can be accessed by clicking here.

Preliminary Steps:

  1. Go to Members, and double-click on the current listing.
  2. Change the name to member A (if not that already). If the SSN is not already member A's, change that as well, and click OK.
  3. Under members, click Add New; create a listing for member B with Bs name and SSN, then click OK.

To figure the number of units to split:

  1. Go to Reports > Member Status Report, and print the latest Member Status Report.
  2. Note the number of units held by member A, and the figure in the Paid-In-Plus-Earnings [PIPE] column.
  3. Go to Tools > Allocate Income and Expenses.
  4. Choose the current year, then click OK.
  5. When the allocation is complete, go to Reports > Allocation of Income and Expenses. Choose the current year, and click PREVIEW.
  6. Print a copy of the report to work. On the printed copy, add the figure for the current year's net profit for member A to the PIPE figure you wrote down from the Member Status Report.
    NOTE: If the Net Profit figure is a loss [negative] subtract that figure instead of adding it.
  7. The resulting figure is the Cost Basis for member A's position in the club.

To show the units being added to member B:

  1. Go to Tools > Beginning Balances.
  2. Enter a date one day after the date of the Member Status Report used above, and select MEMBER for the type.
  3. Select member B. For amount, enter 50% of the Cost Basis computed in the previous set of steps for member A.
  4. Enter 50% of member A's units in the unit box. Keep the type as 'paid-in'. In the comments, enter 50% of the units 'gifted'.

To show the units being removed from member A:

  1. Go to Tools > Beginning Balances.
  2. Enter the same date as used for member B above, and again, the type will be MEMBER.
  3. Select member A.
  4. Enter the same figures that you did for member B, but make SURE to make them negative [both the amount and the units].

When you are done, 50% of member A's position should have been transferred to member B.