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The Tax Thread
Updated: Views / Replies:39,130 / 218
Created: by Big Mike Attachments:3

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The Tax Thread

  #1 (permalink)
Site Administrator
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Big Mike's Avatar
 
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The Tax Thread

I thought we could use a thread devoted to Taxes. This is all things taxes regarding trading.

One example, Advantages/disadvantages for different situations (equities, futures, forex, etc) as well as benefits of filing sole-proprietor vs LLC or as a CTA/professional, etc.

If you have something to share on the subject please chime in.

Mike

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Last edited by Big Mike; December 12th, 2010 at 03:23 PM.
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  #2 (permalink)
Quick Summary
Quick Summary Post

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.

Useful Links:
IRS Publication 550, Investment Income and Expenses
www.irs.gov/pub/irs-pdf/p550.pdf
http://www.irs.gov/publications/p550/index.html

IRS Form 6781, section 1256 contracts
www.irs.gov/pub/irs-pdf/f6781.pdf

IRS Self-Employment Tax rules
http://www.irs.gov/businesses/small/article/0,,id=98846,00.html


Last edited by wirechild; July 29th, 2010 at 08:28 AM.
 
  #3 (permalink)
Market Wizard
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there is no advantage if you trade equities, this much i know.

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  #4 (permalink)
Elite Member
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I have spent a lot of time with this issue. Questions and issues I had to figure out.

Do you have a LOT of deductions or expenses other than trading fees?
Do you need "earned income" to offset other things?
Is all of your income from trading or do you have other things?
Does your spouse work or have income?
Wash sale rule? This was a big concern to me as I trade mostly the same ETF's, no longer an issue as I switch over to futures.

For me the self employment tax negated all benefits of filing as a business. Self-Employment Tax

Great timing for a thread as the IRS rules are certainly going to change for traders over the next couple years.

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  #5 (permalink)
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Y'all may want to check out Traders Accounting

They specialize in tax issues for traders (equities/futures/options/forex), have webinars, emails, etc. that may be helpful to some on this forum.
I do not work for them or get any kickbacks for mentioning them LOL !

Hope this helps,
gulab

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  #6 (permalink)
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Has anyone created an S-Corp instead of an LLC to trade in?

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  #7 (permalink)
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I have used Traders Accounting in the past to help get set up correctly. They are good, but they don't give it away for free. Everyone's situation is different, and there are reasons to set a business up in different forms. It can also depend on where you live, so it does not hurt to talk to your accountant as well (or find one). A local person can also get business entities in place for you. Traders Accounting has the trading business expertise, but a local person that you can go talk to might also serve this purpose.

Personally, I have a corp that controls an LLC that controls my trading accounts. For my situation, this was the best set up. For others that would be overkill.

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  #8 (permalink)
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aslan View Post
Personally, I have a corp that controls an LLC that controls my trading accounts. For my situation, this was the best set up. For others that would be overkill.

Aslan - can you share in what situation the corp/LLC setup is beneficial?

Thanks,
gulab

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  #9 (permalink)
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gulabv View Post
Aslan - can you share in what situation the corp/LLC setup is beneficial?

I am not an account or tax advisor, so please talk to someone that knows what they are doing, as everyone's situation is different. There are a lot of options, and you have to understand the tradeoffs for each different business model, based on what your objectives are.

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  #10 (permalink)
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Well hopefully someone will open up, the point of the thread is to discuss tax situations We know you aren't a CPA giving legal advice



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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