Dear StockCentral members.  I am the treasurer for an investment club.  We are transitioning to the Online iClub software.  In years past, we used a homemade Excel spreadsheet to keep track of the financial information (deposits, unit value, member's unit, etc.). 

I am using the Wizard to help me import the club's old data into MyiClub Online.  I am at the page titled "Record Opening Balances", where you enter each member's money contributions and units up until the transfer date (in my case, this is 12/31/2009).  There are four columns on this page:  "Paid in Cash", "Paid in Units", "Earnings Cash", and "Earnings Units".  All but "Earnings Cash" are easy to fill in using the club's old Excel records.  However, the "Earning Cash" column is a bit tricky, perhaps because I don't entirely understand what it means or it's purpose.  I am assuming that earnings refer to any money made over the years, which would be reported on our annual tax form (dividends, capital gains, etc.) for each member based on their percent ownership of the club.  

My question is, if I do not have all of this information from years past (the club began in 2002), is it ok to leave this column blank?  After all, won't the earnings be accounted for by simply entering each member's shares at the time of transfer to MyiClub online (12/31/09) and the current value of the Club (as of today, 9/15/10).  What is the purpose of the "Earnings Cash" column?

Thank you.

Is it mandatory to enter "Paid in Cash" and "Earnings Cash" as separate amounts?  If the total of the two amounts is entered for "Paid in Cash" and "Earnings Cash" is left blank, won't that result in the correct tax basis (aka Paid In Plus Earnings, aka PIPE)?

Of course, of you don't properly separate PIPE into it's components during the switchover, then the member status report won't show the correct amount for "Paid in Cash".  But (more importantly), PIPE will be correct (won't it?) on the Member Status Report and elsewhere.

Of course, if the club didn't track tax basis for individual club members in it's previous records, that's a significant problem.

-Jim Thomas

Thank you for your response Mr. Malley.  Here is our dilema.  The club, which was founded in 2002, is planning to move to iClub on 1/1/2011.  We have records for members earnings going back to 2006.  The club has used a homemade Excel sheet to keep track of distributions for each year starting 2002.  Each year, we give all members a list of their distributions, and then it is their responsibility to inform the IRS of their earnings or losses.  The club has been compliant with the IRS for each year of its existence.  Now, because we do not have information on each member's earnings prior to 2006, how should we go about dealing with the "Earnings Cash" column if we do not have complete earnings information going back to 2002?  It seems to me that the easiest way would be just treat the switch over to the iClub software as a "new club", sort of speak.  We know how much each member has invested (we have those records back to inception), and we know the current unit value of the club, so wouldn't we be able to give a starting unit value as of 1/1/2011, and that should take care of it?  We will of course still use the Excel sheet to generate each member's distributions for the current year 2010.  I don't see how members would run the risk of being doubly taxed if we proceed this way.  The taxes amount to no more than a few dollars anyway.  Thank you for any advice you might have.

Thank you Mr. Malley.  I will put a ticket in as you suggest.