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Patrick White wrote:
> If you form this type of entity, I think it has favorable
> handling for self-employment tax too, (like maybe none) but I'm
> not sure what the specifics are. (been out of bean counter school
> too long)...
I'm not aware of any.
> Alternatively, if you qualify as an active trader (based on
> number of trades made in the year) under the broad rule Ted
> Tesser lays out in his book, you can take off all your expenses
> from the first dollar, without having to fool with the
> corporation thing. If you are a longer term trader who doesn't
> make say over 100 trades per year, you may want to investigate
> the LLC further. Your accountant likely won't understand this
> because it is based on court cases, not on what they get taught
> in school, or from the IRS code.
I can't vouch for your accountant - but mine can pull up anything on his
computer (including all the regs. revenue rulings, tax court cases,
etc.) in about 10 seconds. If yours can't - perhaps you need a new
accountant. By the way - I agree about the H&R Block types. My
accountant specializes in small to medium businesses - and I suspect
that most traders would profit from an association with an accountant
with a similar speciality.
> By the way, most accountants aren't really working for you. They
> actually should be advocates for you to help you limit your
> taxation as much as possible. Most are more concerned with
> getting sued or being audited...
I expect my accountant to be concerned about whether my return will
subject *me* to an audit or a lawsuit. That's part of his job. If he
does his job properly - then I don't get audited - and hit for back
taxes, penalties and interest - and he doesn't get sued.
I also don't understand the bias against accountants in this message.
Although I'm not an accountant - I know enough tax law to know that I
need an accountant. You probably wouldn't do your trading on the basis
of what you read in a book titled "How to Make $1,000,000 in Futures In
a Week". Doesn't make any more sense to handle your accounting on the
basis of similar books. Most people who are starting out in a new
business can usually profit from meeting with professionals like CPAs
and lawyers to determine the best structure for that business. Robyn
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