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No, not Sub S; C corporation is the only way to go"formalizes" the business
entity (as opposed to a pass-thru which has all the IRS code limitations of
trading as an individual) so that "trader status" is no longer an issue. A
C corporation in which you trade funds you have loaned the corporation
provides many more ways to tax strategize, structure for liability and asset
protection, and using trusts, to provide for certain estate planning
concepts. I have several S's, LLC's, LLP's, and C's; each has advantages
and limitations for different investment vehicles and activities, but for
stock trading, the C works best for me.
NHBob
---- Original Message -----
From: "ChasWaring" <cwwaring@xxxxxxxxxxxxxx>
To: <hpdahm@xxxxxxxxxxxxx>; <omega-list@xxxxxxxxxx>
Sent: Tuesday, July 24, 2001 8:49 AM
Subject: Tax status, sub S
> 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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