Is this the appropriate workshop to ask questions about how clubs handle deductible and non-deductible expense.  We keep having discussions in our club about charging expense by units owned or equal allocation.

Gloria

Hi Gloria,

Yes, the question of whether to allocate expenses by ownership share or equally seems to provoke a lot of debate, and a lot of heat. It really is something that each club has to decide for itself. The avocates of allocating by ownership shares say that the reason the club was formed was the belief that the group efforts could yield better results than the members could do individually, and hence, administrative expenses should be borne in the same way that income is allocated - by ownership. Presumably the expense benefits the club, so the members should spread the burden of those expenses as they do the fruits of their efforts.

Not so, say the advocates of equal allocation. Take the expense of copying costs for the reports handed out at each meeting. It does not cost more for those with more units, so they shouldn't have to bear more of the expense.

My own feeling is that as a club, most expenses should be allocated proportionately to units. I would be happy with all expenses done that way, but I will acknowledge that there can be a few valid exceptions. Years ago, before the rules were changed, I belonged to a club that had rather lavish dinners and outings. Suddenly, those with more units realized that they were footing the bill for the lions share of these expenses. I concede there is a case to be made for equal allocation of dinners, etc.

So, you'll just have to decide for yourself.

Rip West

Gloria, Rip gave you some good advice.   Expenses related to managing the portfolio and running the club, including office and administrative costs, are best handled By membership share, and are tax deductible..    Social expenses wherein all benefit can be handled by equal allotment if all take part, and are not deductible.

Yes, I am the President of NuBeginningz Venture Investment Group and I do the equal allocation when any expenses arise from check writing it seems all fair all members are of equal value but what happen when the members become unequal then I should go to the weight of the person in the group.