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would trading in a sub S corporation be useful?
the business is well defined interms of income and expense and only the net
passes to personal income as a return on investment in the sub S
Chas
----- Original Message -----
From: "Perry Dahm" <hpdahm@xxxxxxxxxxxxx>
To: "Omega-list" <Omega-list@xxxxxxxxxx>
Cc: "Roger L. Shepherd" <mailrs@xxxxxxxxxx>
Sent: Monday, July 23, 2001 11:45 PM
Subject: RE: Tax status
> The 475 election is NOT to elect trader status. It is to elect to treat
> what would in any other situation be capital gains and losses as ordinary
> income and loss. This is so that you may take all of your losses in one
> year. It is however a double edged sword because in profitable years you
> will have ordinary income as opposed to capital gains.
>
> Another common reason for doing this is so that you can have a Keogh or
> pension plan if your only income is from trading. Pensions can only be
> funded with earned income subject to the FICA or Self Employment tax.
>
> Ted Tesser suggests among other things that you might trade through
> different entities all with trader status and some with the Section 475
> election. This gives you the flexibility to take losses in a year they
are
> significant, the ability to fund a pension plan and also the ability to
> treat at least some of your trades as capital gains. I do not necessarily
> subscribe to this line of thought, but it is what he suggests in his
article
> and seminars.
>
> Again please be careful, you are tossing around code sections and terms of
> art, without understanding all of them fully.
>
> Perry
>
> Futures on Stocks Central
> H. Perry Dahm, CPA, CTA
> mailto:hpdahm@xxxxxxxxxxxxx
> 300 Esplanade Drive, 9th Floor
> Oxnard, CA 93030
> 805-981-3929
> 800-350-8744
>
> Disclaimer: This is not an offer of tax advice nor is it to be construed
as
> a solicitation for tax clients. Tax advice should always be tailored to
the
> individual needs and circumstances, and should never be treated as one
size
> fits all treatment. The statements you make on your tax return are made
> under the penalties of perjury and should not be taken lightly or without
> proper consultation and/or knowledge. Always consult a tax professional
> when you have questions or you are in doubt.
>
> -----Original Message-----
> From: Roger L. Shepherd [mailto:mailrs@xxxxxxxxxx]
> Sent: Monday, July 23, 2001 3:59 PM
> To: Omega-list
> Subject: Re: Tax status
>
> It looks as if we have a disagreement of experts. I was quoting from Ted
> Tesser's article on page 90 of the June 2000 issue of Active Trader
magazine
> in which he discusses the 475 election and specifically states that a 475
> election eliminates the preferential tax treatment of the 60/40 split for
> Section 1256 contracts.
>
> Guess we all better do our homework before next tax season.
>
> For those of you who are not familiar with Ted Tesser. He is a CPA who
> specializes in income taxes for traders and investors. His web site is at
> the following URL
>
> http://www.taxtrader.com/home.html
>
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