Hi's to all (my first post here @ T2W)...
I'm having a tough time ciphering through all the information about trading and corporate setup and could use some help and/or advice from those that are or have followed a similar path.
I plan on trading index futures (1256 contract qualifiers) exclusively. I've read plenty of legal cases where the IRS is creating a great deal of difficulty with "trader status" (at least from what I've read it appears that way) so I am adamant about getting a corporation setup for least likelihood of an audit and, at least for now, something I am comfortable with concerning tax liability (60/40 split of capital gains).
If I setup an LLC (single owner), am I likely to raise a flag to the IRS do to the "sole proprietor nature? Should I have a partner or does it not make a difference?
Regarding the 60/40 split of capital gains, how exactly does this work at year end and the distributions I may take throughout the year or one lump sum at the end of the year? In other words, is there a special IRS form to make the distinction clear that the monies in question are generated from activity trading 1256 contracts.
Is having the LLC partnering with a C Corp a better way to go? Disregarding corporate benefits for the time being, is there a "double taxation" issue here?
Without going on any further with details and getting any more complicated than I may already have, any help from traders whom have taken a similar path would be much appreciated.
TIA
Jim
I'm having a tough time ciphering through all the information about trading and corporate setup and could use some help and/or advice from those that are or have followed a similar path.
I plan on trading index futures (1256 contract qualifiers) exclusively. I've read plenty of legal cases where the IRS is creating a great deal of difficulty with "trader status" (at least from what I've read it appears that way) so I am adamant about getting a corporation setup for least likelihood of an audit and, at least for now, something I am comfortable with concerning tax liability (60/40 split of capital gains).
If I setup an LLC (single owner), am I likely to raise a flag to the IRS do to the "sole proprietor nature? Should I have a partner or does it not make a difference?
Regarding the 60/40 split of capital gains, how exactly does this work at year end and the distributions I may take throughout the year or one lump sum at the end of the year? In other words, is there a special IRS form to make the distinction clear that the monies in question are generated from activity trading 1256 contracts.
Is having the LLC partnering with a C Corp a better way to go? Disregarding corporate benefits for the time being, is there a "double taxation" issue here?
Without going on any further with details and getting any more complicated than I may already have, any help from traders whom have taken a similar path would be much appreciated.
TIA
Jim
