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The Tax Thread
Started: by Big Mike Views / Replies:34,346 / 211
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The Tax Thread

  #91 (permalink)
Elite Member
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Gainskeeper

I have always used GainKeeper for all my trades and found it to be reliable.

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  #92 (permalink)
Membership Temporarily Revoked
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rwbil's Avatar
 
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I have bought and sold stocks for decades, but I am relatively new to day trading. I hear most people talking about setting up a corporation in order to be able to deduct all of their trading expenses. But I am more interested in a corporation for asset protection. Maybe I am overly protective, but I am surprised more people do not seem to be concerned about asset protection. In fact I also invest in real estate and one of Landlordís biggest concern is asset protection.

As I learn more about day trading, I see traders shooting to get a few ticks. In order to make any money on a few ticks you have to buy a lot of contracts. I see investors using more leverage than Lehman Brothers did when they went bankrupt. When I see investors using a few thousand dollars to buy millions in contracts I worry.

Maybe the best day traders are young bright individuals who have $10-20K and nothing else. If they lose everything they can just go bankrupt. But my understanding is if you invest as an individual (IRA or not) and you have a pot to piss in, then they can go after all your assets if something goes wrong.

And a stop loss is not going to protect you. What happens if you get a flash crash, a terrorist attack or Iran explodes a nuclear bomb or some other unexpected event and you have millions invested on the wrong side at that instance?
Does anyone else worry about asset protection or am I just pernoid? If so, any suggestions.

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  #93 (permalink)
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NC, USA
 
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This is off topic. Look for an existing thread or start a new one please.

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  #94 (permalink)
Elite Member
Toledo, Ohio/USA
 
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Simple, quick question

2012 was my first year day trading futures, exclusively.

Ended year with small loss (less than -$200) and have spent money on books, services, etc to develop as a trader.

Can I file a 1099-B (on the loss) and deduct relevant expenses on Schedule C? Not inclined to go the LLC route, etc until I ramp up profits.

Whaddya think?

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  #95 (permalink)
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Denison TX
 
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Futures Edge on FIO
EnergyFrank, I would say it depends on the number of trades that you had. I hear the IRS is looking for you to have a minimum number of trades in the 500 range or better for the whole year. If you have that many round turns I would say you are good to go.

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  #96 (permalink)
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I'd like to start a new subject on Tax Avoidance (legal).

As many of you know, I am looking to move out of the country soon and "retire". Retirement is more a state of mind and financial independence, as I plan to continue to trade and would never imagine not trading.

I've been trying to do homework on how to minimize taxes as a US Citizen but living in, and trading from, another country. I am hitting a lot of roadblocks.

There has to be a lot of people here in a similar situation, so I'm looking for some suggestions to point me in the right direction before I hire a professional.

Mike

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  #97 (permalink)
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Well one route, which I'm sure you're aware of, is to renounce your citizenship. But I'm not sure of all the potential consequences that come with that. And reality is that's probably not an option most of us would take. And interestingly some countries, like Monaco, do not allow dual-citizenships.

Without having done much research about this subject, I'll guess that you could gain a lower tax bracket by trading under a company and paying yourself a "reasonable salary" ($30k-$40k) while most of your expenses and assets are paid for and owned by your (foreign/off shore/on shore?) trading company. Unfortunately there would probably be increased "trading professional" status expenses. Or a little of both: personal trading and professional trading firm.

My guess is you could find several tax pros who would basically be presenting you a "low risk-fly under the radar" trading entity setup.

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  #98 (permalink)
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Yes, not willing to renounce citizenship. I agree it will involve an entity but haven't figured out the details yet.

Possibilities include an entity not owned by a US citizen perhaps.

Sent from my Nexus 4

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  #99 (permalink)
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Do what Mr Roger does, go toi Singapore

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  #100 (permalink)
Site Administrator
Manta, Ecuador
 
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Big Mike's Avatar
 
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cory View Post
Do what Mr Roger does, go toi Singapore

I looked into Hong Kong corporations but it seems no longer possible as a US citizen. The US has squashed all tax havens...

Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first.
2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses.
3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make.
4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance.
5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers.
6)
Help using the forum? Watch this video to learn general tips on using the site.

If you want
to support our community, become an Elite Member.

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