Legal Question in Tax Law in California

Investment clubs

Myself and family members recently started a investment club. We collect dues every month and buy stocks. If we sell a stock we reinvest and buy more stock, our stocks do not pay dividends. We received a 1099 and my question is, is do we need to file taxes?


Asked on 3/05/06, 3:53 pm

2 Answers from Attorneys
Donald Field Donald L. Field, Jr., Attorney at Law

Re: Investment clubs

yes. see pages 26 & 27 of:

http://www.irs.gov/pub/irs-pdf/p550.pdf

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Answered on 3/06/06, 12:08 pm
Ken Koenen Koenen & Tokunaga, P.C.

Re: Investment clubs

Yes ... you should have a tax ID number for the club, and be filing a 1065 partnership return. Then you need to distribute the prorata share of profits and losses to the members.

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Answered on 3/05/06, 4:15 pm


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