For most Treasurers, Tax Season is over.  Members have their K-1s in hand, forms are flying off to the Feds (certified mail, please!), and a young club's thoughts turn to Spring.  Now is the calm after the storm, and we're here to field your lingering questions long put-off by the demands of pushing your tax forms out in time.  ICLUBcentral's Technical Support team will lead a discussion on the most common issues on Accounting and Investing products, ranging from the ever-popular "What is that Ex-Dividend Thing, Anyway?" to "Forgot Your Password?  Here's How to Keep It." 

Today's topic: Ex-dividend dates

How we hear about the problem:  A customer calls and tells us that their 1099 from the broker doesn't match their K-1s.  Specifically, the qualified dividends (box 1b on the 1099) doesn't match the qualified dividends on their 1065 K-1, Part 3, line 6b. 

The typical cause:  Incorrect ex-dividend dates.  The software calculates automatically whether the dividend is qualified or not based on the ex-dividend date entered.  We've seen everything from entering completely random dates to consistently entering 2 days before the dividend was received. Any misinformation could cause the dividends to be miscategorized.

Here's what we recommend:  Fix the ex-dividend dates then re-run your taxes.  Here's our notes on the subject:

Changes to the tax laws in Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) define certain dividends as "qualifying" for lower tax rates if the shares are owned for 60 days in the window starting 60 days before the ex-dividend date and ending 60 days after the ex-dividend date.

The ex-dividend date is the earliest date on which a club can sell a stock paying a dividend and still receive that dividend. The ex-dividend date is two trading days before the record date and typically between two and five weeks before the payment (transaction) date. Don't guess based on these figures, though! Be sure to look it up on our web site at http://www.stockcentral.com/tools/researchlinks/tabid/155/language/en-US/Default.aspx. For more on ex-dividend dates, see this page on the SEC's web site:
http://www.sec.gov/answers/dividen.htm

If your broker statement does not include the ex-dividend dates, you can use Stock Central to retrieve them:

1. Go to http://www.stockcentral.com and login with your user name and password.

2. Click on TOOLS > RESEARCH LINKS.

3. Once you're on this page, enter a ticker in the upper right and click GO. Then click on the link labeled VIEW DIVIDENDS under the company profile. This will display all dividends with corresponding ex-dividend dates.

More info on tax law change and why it affects Club Accounting:
http://www.iclub.com/clubs/newsletter/newsletter_article.asp?name=n_20030812