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Its been tried and its been caught. Occasionally the NASD web site news stories will carry enjoyable reading about the creative ways manipulators try to do this, and how they got caught.:p

Not really.. http://www.irs.gov/taxtopics/tc429.html The tax treatment of sales of securities held in connection with a trading business depends on whether a trader has previously made an election under section 475(f) to use the mark-to-market method of accounting. If the mark-to-market...

Assuming that you are one person, filing taxes solo as an individual, using form 1040 for 2005, and as such you also had a requirement to file a form 1040 for 2004, then if you wanted M2M for 2005 you had to file the election by April 15, 2005. Wash sales are not necessarily the end of the...

Google "trader m2m" for all the information one could want on M2M

You should be able to do a screen capture of the full annual IB report and email it to your tax guy. It's far from the best, but with IB you get what you pay for. Regarding mark-to-market, unknowledgeable rumors aside, it makes no difference if you elected section 475 M2M for securities or...

Generally a c-corp should not be a trader. Some more sophisticated techniques (some call it unnecessarily so) call for a c-corp to be associated with a primary entity more suited for the actual trading. That way the few extra benefits are taken in the 2nd entity. If you care to type in Why...

Unless you are a licensed professional trader "on the floor" so-to-speak, then commingling a computer consulting business operation inside the same s-corp. as your trader status activity can only cause you problems with the IRS when it comes time to uphold your position of being a qualified...

If you plan on have health insurance that is lower cost because it is paid by a corp, then I'd suggest you SHOULD have an employee of the corp, otherwise the insurance company rate schedule wont apply. For IRS purposes the corp should generally pay the insurance for the employees, not the...

Without all the facts seen in writing, means that the "facts" can change depending on the story as understood at the time. It is true that some active traders can have earned income and a retitrement plan based on those earnings, just as it is true that other active traders can have income from...

I suggest that there simply are no viable "bennies" availed with an SMLLC for a securities trader with a $10,000 starting capital base. I further suggest that a "disregarded" SMLLC offers few viable "bennies" other than the asset protection as discussed above. There's little ELSE that would...

There are so many mis-informed posts in this thread today, it just goes to show how a little good knowledge and planing can go astray when passed about person-to-person after the specific person it was meant for leaves the room :( As to SMLLC's, which are little more than the alter ego of...

Possibly... and please let us know of any broker that is stupid enough to not require a personal guarantee of the entity's debts.

Absolutely not. You are likely confusing discussions about corporations with discussions about a trader or dealer using the mark-to-market method of accounting for tax purposes.

While I very much liked and understood that link you provided, the (perhaps too subtle) point I was trying to make was that this taxpayer generally will NOT be able to cover the expense of the entity set-up thru purported tax savings when his starting capital is only $10,000. After following...

I know what you're talking about. Similarily, I don't hire health professionals to care for my back since I'm still the one who's well being is at risk for any errors in their diagnosis and I don't see any advantage in hiring these people since even the health pros are giving me different lines.

Spending precious seed-capital money on a tax avoidance plan with a corporation seems premature. Especially when $1,000 used for the corporation means $5,000 less working capital/buying power. That's a significant amount at the level you are talking about! Sure, the entity can provide you...

The + interest applies if the taxes are not paid in full by April 15th.

IRS would normally bill you for the penalty + interest about 6 to 10 weeks after you file the origianl tax return.

Understood, and again - how do you expect to ensure yourself that this will not be a personal holding company? I'm not saying a c-corp can not be used if done properly. I'm just questioning the scenario as you've laid it out above.

Sure you may certainly forma c-corp that allows all the juicy tax deductions, such as a full medical expense reimbursement plan. And as long as this is a bona-fide trade or business and you treat it correctly, it should stand up to IRS examination. But I wonder - how is this arrangement to...