Benefits of trading through an LLC.

It's been discussed here a few times so do a search to get a more detailed viewpoint.

General consensus is that if you incorporate, you are better served organizing as a Sub-chapter S rather than an LLC since ALL LLC profit is taxed as income (and the associated taxes that go along with it) if you do passthru whereas Sub-S does not.
 
Quote from chrisjs87:

Are there any tax benefits associated with trading within an LLC as opposed to simply trading as an individual?
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most people are better of just trading as an individual with trader declaration.
 
Quote from vhehn:

most people are better of just trading as an individual with trader declaration.
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yes,but as far as i know-once you elect yourself as trader-there is no way back.
IRS is not really clear about it,but they are very clear about penalties. they actually clueless when i talk to them about it over the phone
 
Quote from cstfx:

It's been discussed here a few times so do a search to get a more detailed viewpoint.

General consensus is that if you incorporate, you are better served organizing as a Sub-chapter S rather than an LLC since ALL LLC profit is taxed as income (and the associated taxes that go along with it) if you do passthru whereas Sub-S does not.
More...

WOW! one would never want to trade in a sub s as at least 50% of your trading profit will be distributed to you as payroll causing you to pay a 15.3% payroll tax. If you are trading Forex or Futurers and are an active trader the LLC will allow you to deduct all of your trading expenses. A sub s is also a complete pass through, so who ever wrote this is a complete tax idiot. BE CAREFUL WHO YOU LISTEN TO IN THE CHAT ROOM.
 
Quote from jcrimmins:

WOW! one would never want to trade in a sub s as at least 50% of your trading profit will be distributed to you as payroll causing you to pay a 15.3% payroll tax. If you are trading Forex or Futurers and are an active trader the LLC will allow you to deduct all of your trading expenses. A sub s is also a complete pass through, so who ever wrote this is a complete tax idiot. BE CAREFUL WHO YOU LISTEN TO IN THE CHAT ROOM. JC Traders Accounting
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Didn't say that sub-s doesn't have pass-thru, numbnuts - said that LLC passthru is treated as income on personal tax return whereas sub-s is not taxed as income
 
Quote from cstfx:

Didn't say that sub-s doesn't have pass-thru, numbnuts - said that LLC passthru is treated as income on personal tax return whereas sub-s is not taxed as income
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What does that mean? Since both are pass throughs what is the income the sub s passes through to the share holders taxed at. AGAIN "BE CAREFUL WHO AND WHAT YOU LISTEN TO IN CHAT ROOMS""JC
 
Quote from chrisjs87:

Are there any tax benefits associated with trading within an LLC as opposed to simply trading as an individual?
More...

OP,

If you have questions ask - I'll respond later


http://www.elitetrader.com/vb/showthread.php?s=&threadid=172701&highlight=llc

http://www.elitetrader.com/vb/showthread.php?s=&threadid=157238&highlight=llc

RN

eta - I need to add - I no longer use Traders Accounting, switched to Green Company – but they ain’t cheap...

And I would recommend steering clear of Traders Accounting

 
I just want to agree that you need to be very careful what you listen too in chat rooms etc. Best to always check with your accounting professional. Having said that, whoever gave the advice that a sub s is better than an LLC needs to stop suggesting that because it is not the case. Each situation is different, which is why you should always research what is best for your own situation. I personally have an LLC account for several good reasons and I know from my own research, talking with my CPA and my experience, it is better for me having an LLC account set up, treated like a partnership for tax purposes. People should not be giving advice if they have not got the expertise, and people should not listen to those who do not have validated expertise.
 
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