|
PureBytes Links
Trading Reference Links
|
<x-html><HTML>
<BODY BGCOLOR="#FFFFFF">
clarkmj wrote:
<BLOCKQUOTE TYPE=CITE><FONT COLOR="#000000"><FONT SIZE=-1>I was just sitting
here doing some work on my IRA and an idea hit me on how to beat the tax
man. Please send any comments to me.</FONT></FONT> <FONT COLOR="#000000"><FONT SIZE=-1>The
idea being to use all your accounts to generate as much tax free income
into your IRA as possible.</FONT></FONT> <FONT COLOR="#000000"><FONT SIZE=-1>Assume
$500,000 trading capital</FONT></FONT><FONT SIZE=-1>Current IRA $5000</FONT> <FONT COLOR="#000000"><FONT SIZE=-1>Here
is the plan.</FONT></FONT><FONT COLOR="#000000"><FONT SIZE=-1>1.
Form a corporation and issue 500000 $1 non dividend paying share to yourself.
Stipulate in the articles of incorporation that as CEO, your room, board,
car and other expenses will be pick-up by the corporation.</FONT></FONT> <FONT SIZE=-1>2.
Declare that the corporation will sell 5000 dividend paying shares.</FONT> <FONT SIZE=-1>3.
Sell the 5000 shares to your IRA.</FONT> <FONT SIZE=-1>4. Do
business as usual. Easier to deduct expenses. Pay yourself
rent, etc...</FONT> <FONT SIZE=-1>5. At the end of the trading
year total up the net revenue and issue a dividend to reduce revenue to
zero. If I understand corporate law correctly, you would only owe
corporate income tax on any income which whould net out to be zero because
of the dividend, therefore no tax.</FONT> <FONT SIZE=-1>6. Your
IRA then grows based on your ROR on $505,000 vs. $5000</FONT> <FONT SIZE=-1>Any
idea on why this will or will not work.</FONT> <FONT COLOR="#000000"><FONT SIZE=-1>Thanks</FONT></FONT><FONT COLOR="#000000"><FONT SIZE=-1>Mike
Clark</FONT></FONT><FONT COLOR="#000000"><FONT SIZE=-1></FONT></FONT>
<P><FONT COLOR="#000000"><FONT SIZE=-1>
Hi Mike,</FONT></FONT><FONT COLOR="#000000"><FONT SIZE=-1></FONT></FONT>
<P><FONT COLOR="#000000"><FONT SIZE=-1>
I wont speculate on the legality of your plan, creative as it is, but I
see one potential pit fall. If the corporation pays your rent, car,
living expences, etc. that is taxable to the recipiant. Also
you would probably have to issue two classes of stock, class A (non-dividend)
and class B (dividend paying).</FONT></FONT><FONT COLOR="#000000"><FONT SIZE=-1></FONT></FONT>
<P><FONT COLOR="#000000"><FONT SIZE=-1>
A far better way to handle this would be to establish the corporation as
described. Then set up a legal 401k plan with generous bennifits
to you. As you may know, you can contribute more to a 401k than an
IRA, also your "corporation" can contribute matching funds, all tax free.
You could use these funds to diversify your portfolio.</FONT></FONT><FONT COLOR="#000000"><FONT SIZE=-1></FONT></FONT>
<P><FONT COLOR="#000000"><FONT SIZE=-1>
I have to ask, do you realy want your IRA to hold only one stock based
on your trading, no matter how good you are? Most experienced teaders,
those trading for a living, move funds out of their trading account into
a deversified and more secure portofolio including bonds, good common stocks,
and real estate. Remember it's your futere.</FONT></FONT><FONT COLOR="#000000"><FONT SIZE=-1></FONT></FONT>
<P><FONT COLOR="#000000"><FONT SIZE=-1>
Good luck and good trading,</FONT></FONT>
<BR><FONT COLOR="#000000"><FONT SIZE=-1>
Ray Raffurty</FONT></FONT></BLOCKQUOTE>
</BODY>
</HTML>
</x-html>From ???@??? Fri May 29 14:01:31 1998
X-POP3-Rcpt: neal@xxxxxxxxx
Return-Path: <owner-realtraders@xxxxxxxxxxxxxx>
Received: from accessone.com (list.listserver.com [198.68.191.15])
by purebytes.com (8.8.4/8.8.4) with ESMTP
id NAA14362 for <neal@xxxxxxxxxxxxx>; Fri, 29 May 1998 13:47:54 -0700
Received: from localhost (localhost [127.0.0.1])
by accessone.com (8.8.5/8.8.5/PIH) with SMTP id NAA15002;
Fri, 29 May 1998 13:47:14 -0700 (PDT)
Received: from out2.ibm.net (out2.ibm.net [165.87.194.229])
by accessone.com (8.8.5/8.8.5/PIH) with ESMTP id NAA14240
for <realtraders@xxxxxxxxxxxxxx>; Fri, 29 May 1998 13:40:18 -0700 (PDT)
Received: from banet.net (slip166-72-86-12.ma.us.ibm.net [166.72.86.12]) by out2.ibm.net (8.8.5/8.6.9) with ESMTP id UAA21536; Fri, 29 May 1998 20:39:26 GMT
Message-Id: <356F1D05.12FA0A4A@xxxxxxxxx>
Date: Fri, 29 May 1998 16:39:33 -0400
Reply-To: rraff@xxxxxxxxx
Sender: owner-realtraders@xxxxxxxxxxxxxx
From: Raymond Raffurty <rraff@xxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: Re: An idea to beat the tax man
References: <000001bd8b36$a3d85300$653837a6@xxxxxxxx>
MIME-Version: 1.0
Content-Type: multipart/alternative; boundary="------------E2C92A8972749ACC4C5C1F6F"
X-To: clarkmj@xxxxxxxxxx
X-Cc: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
X-Mailer: Mozilla 4.05 [en] (Win95; I)
X-Listprocessor-Version: 8.1 -- ListProcessor(tm) by CREN
<x-html><HTML>
<BODY BGCOLOR="#FFFFFF">
clarkmj wrote:
<BLOCKQUOTE TYPE=CITE><FONT COLOR="#000000"><FONT SIZE=-1>I was just sitting
here doing some work on my IRA and an idea hit me on how to beat the tax
man. Please send any comments to me.</FONT></FONT> <FONT COLOR="#000000"><FONT SIZE=-1>The
idea being to use all your accounts to generate as much tax free income
into your IRA as possible.</FONT></FONT> <FONT COLOR="#000000"><FONT SIZE=-1>Assume
$500,000 trading capital</FONT></FONT><FONT SIZE=-1>Current IRA $5000</FONT> <FONT COLOR="#000000"><FONT SIZE=-1>Here
is the plan.</FONT></FONT><FONT COLOR="#000000"><FONT SIZE=-1>1.
Form a corporation and issue 500000 $1 non dividend paying share to yourself.
Stipulate in the articles of incorporation that as CEO, your room, board,
car and other expenses will be pick-up by the corporation.</FONT></FONT> <FONT SIZE=-1>2.
Declare that the corporation will sell 5000 dividend paying shares.</FONT> <FONT SIZE=-1>3.
Sell the 5000 shares to your IRA.</FONT> <FONT SIZE=-1>4. Do
business as usual. Easier to deduct expenses. Pay yourself
rent, etc...</FONT> <FONT SIZE=-1>5. At the end of the trading
year total up the net revenue and issue a dividend to reduce revenue to
zero. If I understand corporate law correctly, you would only owe
corporate income tax on any income which whould net out to be zero because
of the dividend, therefore no tax.</FONT> <FONT SIZE=-1>6. Your
IRA then grows based on your ROR on $505,000 vs. $5000</FONT> <FONT SIZE=-1>Any
idea on why this will or will not work.</FONT> <FONT COLOR="#000000"><FONT SIZE=-1>Thanks</FONT></FONT><FONT COLOR="#000000"><FONT SIZE=-1>Mike
Clark</FONT></FONT><FONT COLOR="#000000"><FONT SIZE=-1></FONT></FONT>
<P><FONT COLOR="#000000"><FONT SIZE=-1>
Hi Mike,</FONT></FONT><FONT COLOR="#000000"><FONT SIZE=-1></FONT></FONT>
<P><FONT COLOR="#000000"><FONT SIZE=-1>
I wont speculate on the legality of your plan, creative as it is, but I
see one potential pit fall. If the corporation pays your rent, car,
living expences, etc. that is taxable to the recipiant. Also
you would probably have to issue two classes of stock, class A (non-dividend)
and class B (dividend paying).</FONT></FONT><FONT COLOR="#000000"><FONT SIZE=-1></FONT></FONT>
<P><FONT COLOR="#000000"><FONT SIZE=-1>
A far better way to handle this would be to establish the corporation as
described. Then set up a legal 401k plan with generous bennifits
to you. As you may know, you can contribute more to a 401k than an
IRA, also your "corporation" can contribute matching funds, all tax free.
You could use these funds to diversify your portfolio.</FONT></FONT><FONT COLOR="#000000"><FONT SIZE=-1></FONT></FONT>
<P><FONT COLOR="#000000"><FONT SIZE=-1>
I have to ask, do you realy want your IRA to hold only one stock based
on your trading, no matter how good you are? Most experienced teaders,
those trading for a living, move funds out of their trading account into
a deversified and more secure portofolio including bonds, good common stocks,
and real estate. Remember it's your futere.</FONT></FONT><FONT COLOR="#000000"><FONT SIZE=-1></FONT></FONT>
<P><FONT COLOR="#000000"><FONT SIZE=-1>
Good luck and good trading,</FONT></FONT>
<BR><FONT COLOR="#000000"><FONT SIZE=-1>
Ray Raffurty</FONT></FONT></BLOCKQUOTE>
</BODY>
</HTML>
</x-html>From ???@??? Fri May 29 14:01:33 1998
X-POP3-Rcpt: neal@xxxxxxxxx
Return-Path: <owner-realtraders@xxxxxxxxxxxxxx>
Received: from accessone.com (list.listserver.com [198.68.191.15])
by purebytes.com (8.8.4/8.8.4) with ESMTP
id NAA14422 for <neal@xxxxxxxxxxxxx>; Fri, 29 May 1998 13:55:37 -0700
Received: from localhost (localhost [127.0.0.1])
by accessone.com (8.8.5/8.8.5/PIH) with SMTP id NAA15773;
Fri, 29 May 1998 13:54:43 -0700 (PDT)
Received: from mtiwmhc02.worldnet.att.net (mtiwmhc02.worldnet.att.net [204.127.131.37])
by accessone.com (8.8.5/8.8.5/PIH) with ESMTP id NAA14406
for <realtraders@xxxxxxxxxxxxxx>; Fri, 29 May 1998 13:41:42 -0700 (PDT)
Received: from worldnet.att.net ([12.69.33.103])
by mtiwmhc02.worldnet.att.net (InterMail v03.02.03 118 118 102)
with ESMTP id <19980529204100.XBZQ5374@xxxxxxxxxxxxxxxx>;
Fri, 29 May 1998 20:41:00 +0000
Message-Id: <356F176B.9B9C9C17@xxxxxxxxxxxxxxxx>
Date: Fri, 29 May 1998 15:15:39 -0500
Reply-To: harlequin.stone@xxxxxxxxxxxxxxxx
Sender: owner-realtraders@xxxxxxxxxxxxxx
From: Ruth Alexander <harlequin.stone@xxxxxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: Re: Free E-mail Program
References: <000701bd8aed$a4c1f9e0$5445430c@xxxxxxxx>
MIME-Version: 1.0
Content-Type: text/plain; charset=us-ascii
Content-Transfer-Encoding: 7bit
X-To: Richard Chehovin <GalacticFXInternational@xxxxxxxxxxxxxxxx>
X-Cc: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
X-Mailer: Mozilla 4.04 [en]C-WorldNet (Win95; I)
X-Listprocessor-Version: 8.1 -- ListProcessor(tm) by CREN
Hi Richard,
Also, http://www.hotmail.com has a free e-mail setup site, and I believe
you can choose not to get solicitations on it. At least I haven't
received any, and have had an address with them for a couple of months.
They also offer USA Today, and Wired News, and other new posts free of
charge to users, so you can get free news e-mailed directly to your
personal hotmail address every day. I think they make their money from
advertisers wanting to advertise to their e-mail audience. These are
great sites, (Juno, and hotmail) because with them, one is not limited
to receiving e-mail on only their home computer, but can access it
anywhere in the world.
Best regards,
Ruth
> Richard Chehovin wrote:
>
> Good Morning RTer's,
>
> Came across a free E-mail program from Juno.com. Yes the cost of the
> program is free and the month charge is nothing. The catch is in order
> to use it, you must fill out an extensive questionnaire during setup.
> You also get numerous solicitations.
> I guess that is the real cost. Any ways, I thought if you know someone
> you could use it, pass it along. I have attached for your convenience.
>
> Richard J. Chehovin
|