1. Closing the Investment Club Books By Doug Gerlach,
ICLUBcentral Inc, Closing the Investment Clubs Books by Doug
Gerlach [email protected] ICLUBcentral Inc. http://www.iclub.com
End of Year Procedures Series of steps to: Ensure accuracy of clubs
books. Catch any errors before they compound and become difficult
to resolve. Provide members with information about club performance
and results. Get ready to generate tax returns. 2 1
2. Closing the Investment Club Books By Doug Gerlach,
ICLUBcentral Inc,Let Members Know What to Expect Make sure members
know what to expect at year-end: year-
http://www.iclub.com/support/tax_season.asp FINAL vs. DRAFT forms
November: Pre-order your Tax Printers. Pre- What to do: Clear
purchase with club and purchase Tax Printers. Tell club members to
expect tax forms in February. December: Be patient. What to do: Put
together audit committee and review books. Tell club members to
expect tax forms in February. January: Audit your books. What to
do: Check iclub.com for the status of tax forms. Tell club members
to expect tax forms in February. February: Run your taxes (Congress
& IRS willing). What to do: Complete tax forms for club
members. 3 Review Software Settings Check your program allocation
settings: Club Accounting 3: Tools > Settings. 3: myICLUB.com:
Accounting > Utilities > myICLUB.com: Allocation settings.
Recommended settings: Should use Time-based allocations. Time- Set
to not distribute units. 4 2
3. Closing the Investment Club Books By Doug Gerlach,
ICLUBcentral Inc, Set Stocks/Funds Properly Check Security
settings: Club Accounting 3: Securities > [Double-click on 3:
[Double- Security name to edit] edit] myICLUB.com: Accounting >
Securities > Update myICLUB.com: Security Settings Ensure Type
is correct: Stocks: common stocks Mutual funds: mutual funds REITs:
REITs Limited Partnerships & other: Other/Other Publicly Traded
CDs, Bonds: Fixed Cash Investment (CA3 only) 5 Securities to Avoid
in Clubs Some securities pose particular problems for clubs &
should be sold before year-end year- to eliminate problems in
future years: Gold/Commodity ETFs Real Estate Investment Trusts
(REITs) Publicly Traded Partnerships (PTPs) Master Limited
Partnerships (MLPs) 6 3
4. Closing the Investment Club Books By Doug Gerlach,
ICLUBcentral Inc, Club Donations Consider making donations to
eligible charities. Club can donate securities or cash.
ICLUBcentral software is only software that supports donations of
securities. Charitable deduction passes through to members. For
donations of securities, cost basis is stepped up to present value
(thus can avoid capital gains). 7 Finalize Club Data in Books
Ensure all transactions up to & including 12/31 are entered.
WARNING: Do NOT enter withdrawals or other transactions on 12/31.
Move any 12/31 transactions to 12/30. Move any mutual fund
distributions paid in next year but taxable in prior year to 12/30.
8 4
5. Closing the Investment Club Books By Doug Gerlach,
ICLUBcentral Inc,Watch for Problem Transactions Dividends from
stocks must be entered as Security Transactions (not Cash
Transactions). Ex-Dividend dates must be included in order to Ex-
determine if dividend qualifies for lower tax treatment. Member
Fees are only used for penalty situations. Such as late fees or
bounced check fees. All other monies contributed by members should
be recorded as Member Payments. Payments. 9 Handling Fund
Distributions Mutual funds & ETFs report breakdown of quarterly
distributions only at year-end year- Distributions can be made up
of: Dividends Short- Short-term gains Long- Long-term gains Return
of capital Interest From year-end report, determine breakdown and
re- year- re- enter quarterly distributions to reflect all
components. For instance, enter 25% of each component at each
quarterly distribution transaction. 10 5
6. Closing the Investment Club Books By Doug Gerlach,
ICLUBcentral Inc, Create Year-End Valuation Year- Create new
Valuation Statement for 12/31. If market is closed on 12/31, use
security prices from last day market was open. Do NOT use Valuation
Statement from December meeting. 11 Allocate Income & Expenses
Allocate income and expenses for 12/31. Club Accounting 3: Tools
> Allocate income 3: and expenses myICLUB.com: Accounting >
Utilities > myICLUB.com: Allocate income and expenses Done only
once annually at year-end. year- If own REITs or Mutual Funds,
enter the qualified amount (from 1099) when you Allocate Income and
Expenses. 12 6
7. Closing the Investment Club Books By Doug Gerlach,
ICLUBcentral Inc, Reconcile Club Data Verify club books against
bank/brokerage statements. Check that totals on Capital Gains
Reports, Allocation Report, Valuation Statement, & Transaction
Summary match financial institution statements. 13 Financial
Institution Documents Year-end statements in January. Year- Tax
documents mid-February, mid- 1099-B - Proceeds from Broker and
Barter 1099- Exchange Transactions 1099-DIV - Dividends and
Distributions 1099- 1099-INT - Interest Income 1099- 1099-MISC -
Miscellaneous Income 1099- 1099-OID - Original Issue Discount 1099-
Schedule K-1 (Form 1065) - Partners Share of K- Income, Credits,
Deductions, etc. 14 7
8. Closing the Investment Club Books By Doug Gerlach,
ICLUBcentral Inc,Generate Reports for Members Make sure members
have access to: Valuation Statement for 12/31. Allocation of Income
& Expenses for 1/1 to 12/31. Income & Expense Statement
& Balance Sheet. Optionally: Portfolio Diversification Complete
Journal for year 15 Audit the Books Convene Audit Committee of club
members. Treasurer is not member, but should be available for
questions. Download Audit Checklist from StockCentral Learning
Library http://www.stockcentral.com/learn/learninglibrary.aspx 17
8
9. Closing the Investment Club Books By Doug Gerlach,
ICLUBcentral Inc, Treasurer- Treasurer-Provided Reports For the
full year: Complete Journal/Ledger Cash Journal Cash Contributions
Report Transactions Summary Put checkmark in box Subtotal Tax.
Distribs Distribs Individual Investment History For each stock
owned during period Individual Valuation Units Ledger For each
member End-of-Year Valuation Statement End-of- 18 Other Treasurer
Provided Documents All broker statements All trade confirmations.
All bank statements. All deposit slips, if available. All cancelled
checks. All Dividend Reinvestment Plan statements. All 1099-
1099-DIV and 1099-INT statements. 1099- All stock certificates in
possession of club. 19 9
10. Closing the Investment Club Books By Doug Gerlach,
ICLUBcentral Inc, Audit Committee Tasks Committee meets &
verifies entries in books from broker & bank statements. Check
bank & broker balances to verify entries matches clubs books,
including dates. Verify clubs books show same number of shares and
dividends for each stock as broker & DRP statements.
Cross-check check register, bank statement, & Cross- club
books. Verify beginning and ending balances for all accounts and
Valuation Statement. Sign Annual Verification Report.
20ICLUBcentral Technical Support Web-based Support Web-
www.iclub.com/support Telephone Support 877-33-ICLUB 877-33- 9:30
AM to 6:00 PM Eastern Time Monday through Friday Renew your Club
Accounting Maintenance or myiclub.com subscription: Call
ICLUBcentral at 1-877-33-ICLUB 1-877-33- Visit www.iclub.com/store/
21 10
11. Closing the Investment Club Books By Doug Gerlach,
ICLUBcentral Inc,For More Information ICLUBcentral Inc.
www.iclub.com Write me: [email protected] 23 11