Withdrawal Distribution Report
The Withdrawal Distribution Report shows the earnings and capital gains that may be taxable when a member completely or partially withdraws from the club. Use this report to provide a withdrawing member with information about his or her withdrawal for his or her tax records.
Print this report and give it to the withdrawing member.
The figures in this report are not a definitive description of the tax consequences of a member's withdrawal. The withdrawing member should consult with his or her tax advisor.
Withdrawal Distribution Report Options
Use the drop down list to select the member and the withdrawal date. To choose more than one withdrawal, press the Ctrl key and click on the other withdrawals while holding the Ctrl key down.
Withdrawal Distribution Report Description
The report contains a full description of the withdrawal. For reports printed prior to then end of the year, consider the as tentative. The withdrawing member should not be used this report to determine tax liability if the report is generated prior to the end-of-year closing of the books.
You should print a copy of this report for the withdrawing member after you close the books for the tax year, and after you complete the distribution of earnings. You should also prepare a K1 form for the withdrawing member.
Member's share of Distributions section
The information in this section appears for both partial and complete withdrawals. The Column report shows the withdrawing member's share of the club's earnings between the last distribution date and the withdrawal date.
By default, the amounts in this section are calculated using a time-based method. The time-based method allocates income and expenses from taxable transactions to each member according to the amount of the club each member owned at the time of the transaction. This is the default and the recommended method of allocating income and expenses. The non-time-based method allocates income and expenses according to the amount each member owned at the time of their withdrawal or as of the end of the club's fiscal year. You can check the club setting by going to Accounting > Utilities > Allocation Settings. For more on that page, please see https://www.iclub.com/faq/index.php?solution_id=1138
- Dividends - Dividends distributed. This also includes dividends on which foreign taxes were paid.
- Interest - Taxable interest distributed.
- Qualifying Dividend - Dividends that qualify for the lower tax rate as of the recent 2003 tax law changes. Changes to the tax laws in Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) define certain dividends as "qualifying" for lower tax rates if the shares are owned for 60 days in the window starting 60 days before the ex-dividend date and ending 60 days after the ex-dividend date.
- Expense - Non-investment expenses paid out of a cash account other than Petty Cash.
- Foreign Tax - foreign taxes paid
- Short Term Capital Gain – STCG (sold less than one year after purchase) distributed
- Long Term Capital Gain – LTCG (sold more than one year after purchase) distributed.
Securities Transferred (including basis adjustments)
This section will only appear if a member has been given shares of stock as part of their withdrawal. Otherwise it will not be listed.
- Date Purchased, Symbol, Company - When the club bought the shares, the symbol, and the name of the company involved
- Shares - How many shares the club is giving, from the specific block of shares.
- Fair Market Value - How much the shares would have been worth, if the club had sold them at the rate used in the withdrawal
- Club's Cost Basis - The club's cost basis for the particular block of shares.
- Partner's Adjusted Basis - The cost basis of the particular block of shares when the member takes ownership of them. For partial withdrawals, the basis will not change. For full withdrawals, the basis will often be higher or lower than the club's basis. For more on how cost basis can change when giving stock to a member, please see FAQ 414: Cost Basis of Transferred Securities in a withdrawal.
Withdrawal details (including tax consequences) section
- Gross withdrawal amount – number of units withdrawn times the value of a unit on the distribution date
- Fees and penalties – the total of any fees or penalties charge to the withdrawing member.
- Net withdrawal amount – “Gross withdrawal amount” less “Fees and penalties”
- Cash received – the amount of cash distributed to the withdrawing member
- Stock value withdrawn – The value of any stock distributed to the withdrawing member. For more on how cost basis can change when giving stock to a member, please see FAQ 414: Cost Basis of Transferred Securities in a withdrawal.
- Net value withdrawn – the total of “Cash received” and “Stock value withdrawn”
- Tax Basis prior to withdrawal - The withdrawing member's tax (cost) basis in the club prior to this withdrawal distribution.
- Current Year Earnings/ (Loss) - The total amount of earnings distributed to the member for the year the member withdrew (from the last distribution date to the withdrawal date).
- Adjusted tax basis – “Tax Basis prior to withdrawal” less “Current Year Earnings/ (Loss)”
- Cash received – Amount of cash given to the withdrawing member.
- Member's adjusted basis in stock withdrawn - Withdrawing member's adjusted tax basis in the block of securities transferred.
- Realized Gain/(Loss) – the taxable gain or loss realized by the member as a result of the withdrawal. This figure is not reported on the 1065, or a member's K-1 form, but must be reported by the member on their personal taxes.
- For individual members, this information will go on their own Form 8949, and also their Schedule D.