I'm not going to beat this death and argue here.Quote from vhehn:
not true at all.
you can argue all you want but its bs. if you have any proof put it on the table.Quote from rolextrader:
I'm not going to beat this death and argue here.
This information comes from the IRS in a panel meeeting it had with some of the leading tax advisors in the country who specialize in Trader Tax Status.
If you get audited as an individual filing for Trader Tax Status and don't have at least 500 round turns for 2008, the status will be rejected by the IRS.
If you have the time and money to fight them, good luck.
Quote from jnorty:
There's so much bs and misinformation surrounding trader taxation and formation. The only potential advantage and its really not an advantage in filling a llc is writing off your health ins
and a retirement plan. The downside is you must pay the huge fica of over 15% which if you make 300k or more is a much greater penalty than filing as a invidual with a sch c and wirting off nobenefits. I think many of the notes on here in favor of a llc are people who are part time traders who would get caught filing as a trader on 1040 thinking a llc would give them cover. I've been filing as a 1040 trader since 1999 and have made as much as 10 bil of sales in a year and never had one problem. I've made 7 fig's several times and i've had a mtm loss of 500k and got my refund with no snags or questions. The key is i have no w-2 income and i trade huge so no questions.
The IRS has plenty of soft, unwritten "rules" on this but there are simply not published. They like having the freedom and latitude on this issue. And I can assure you the 500 and 75% numbers are the thresholds used going forward and that IF YOU GET AUDITED AND THE IRS DECIDES YOU DO NOT QUALIFY FOR TRADER TAX STATUS, you will pay dearly trying to convince them otherwise by not having the 500 and 75% to back up your argument.Quote from jnorty:
Rolex trader you're already spreading bs and lies. THE IRS HAS NO SET RULES ON WHAT DEFINES A TRADER. THEY ONLY STATE IT INVOLVES SUBSTANTIAL TRADING.As i said if ones a real trader they have nothing to worry about. You're basically saying if you're really not a full time trader setup a llc and get away with it.And i'd make a pt that obama with his anti business policies will go after auditing business much more
Quote from rolextrader:
The IRS has plenty of soft, unwritten "rules" on this but there are simply not published. They like having the freedom and latitude on this issue. And I can assure you the 500 and 75% numbers are the thresholds used going forward and that IF YOU GET AUDITED AND THE IRS DECIDES YOU DO NOT QUALIFY FOR TRADER TAX STATUS, you will pay dearly trying to convince them otherwise by not having the 500 and 75% to back up your argument.
I'm not saying that if you're not a full time trader, you should have an LLC. I am saying that an LLC is less likely to receive the scrutiny that an individual will, regardless if the conditions are met.
Best of luck to you who roll the dice on this.
Any audit is no picnic, but one on this issue is hell.