Created an Investment Club - Taxes?
Join Date: Aug 2009
Posts: 1,168
I created an investment club with some friends and family members. The bank and brokerage accounts are under my name, with each members writing checks to me each month for dues. We each have a voting power of 1 for any proposed buys/sells regardless of % ownership.
It is now tax time. We have no realized capital gains, but I do need to report dividend income, interest, etc. Is it incorrect for me to file a 1099 myself and pay the taxes on those gains? Or should I be setting up individual K-1's or 1099's for each member based on % ownership?
Because there is no formal joint account or ownership I am unsure as to how to file taxes correctly. Any suggestions?
Join Date: Aug 2004
Posts: 10,515
Unless you created the club as a proper partnership or whatever the other choice is, you have to file the taxes because its all under your name.
You should also use a broker that has a specific setup for investment clubs/partnerships.
