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How do I record a monthly stock club payment?

ManniesmManniesm Member
edited July 2018 in

Because the individual stocks keep changing, I treat my portion of the club as a single share.  Merging the new payment into the whole is the problem.

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  • UnknownUnknown Member
    edited July 2016

    I'm guessing that you are wanting to keep track of your basis in the stock club while at the same time attempting to track the market value of your ownership based on the market value of the stocks owned by the club.


    Instead of treating your ownership as a single share I would instead account for each contribution to the club as the purchase of "shares" equal to the number of dollars contributed.  That is, each share has a basis of $1.  Then when you get your periodic report of the market value of the stocks owned by the club and can determine your ownership value, enter a "quote" for the "club stock" that gets you to the correct answer.


    Example:


    Initial club payment of $1,000 results in the purchase of 1,000 "club" shares and your holdings in the club represent 10% ownership.  At month end the club determines that the value of the stocks held has a value of $14,000.  The value to you is $1,400 so you enter a quote for the club stock of $1.40.  Market value of holdings = $1.40 x 1,000 = $1,400 and the basis of the stock is $1.00 x 1,000 = $1,000.


    Tom Young
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