Husband & Wife Trading Partnership

Thanks for your replies Robert.

For the family partnership you just wrote about, can such a entity work for non-family partners as well?

Can I have friends in the partnership as well, and would they have the same tax benefits?

-- ITZ
 
Quote from GreenTraderTax:



Thanks a lot. Active Trader sells my past articles on their Web site. http://www.activetradermag.com/ They don't allow us to reprint them, as they own the copyright.

A list of my articles is here.
http://www.greencompany.com/EducationCenter/InTheMediaActiveTrader.shtml

Our site Web page for husband wife trading partnerships has the same info as the July 2003 Active Trader article. View it here.
http://www.greencompany.com/Traders/TraderEntities.shtml#husbandandwife
Only the magazine editors always do a better job with my writing.

Keep the questions coming on HW partnerships and I will answer them.

Robert Green, CPA
GreenTraderTax.com
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Great website, Robert.
 
Quote from InTheZone:

Anyone out there have a husband and wife trading partnership for tax saving purposes?

If so, how do you divide the labors of your trading business?

Thanks for the thoughts.

-- ITZ
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Run, run, run....don't walk from this type of relationship. I've had to literally fire a couple of wives (of mine) when working together.....and you can imagine how well that worked in the rest of our lives. This is, in all likelehood, a "lose-lose" arrangement.

(a bit "tongue in cheek"....but, then, think about it!)

Don
 
Understood.....if they're going to do it anyway, they may as well understand and appreciate the tax benefits....as in all trading ventures, the "successful minority" will rise to the top.

"I'll work on the trading, you work on the taxes"....

Don
 
Quote from GreenTraderTax:



I appreciate Don Bright's point and perspective. He is a wise man in my opinion.

However Don, "working together" is not a requirement for a husband wife general partnership (tax benefit). It is merely one of the factors you can use. If you wish to include this factor (the spouse is "active" rather then "passive" in your HW partnership), then consider that you don't have to include your spouse on your trading decisions and process. Delegating some bookkeeping and general research will do.

The media has reported that during the bear market many married couples blamed each other on their respective or joint brokerage account losses. So I agree with Don, prudence is needed here.

Many traders have husband & wife trading partnership factors in place without even realizing it. The IRS could force you to deal with some of them and not understanding the rules can lead to trouble. Get ahead of the curve, learn the rules and use them to reduce your tax bills.

Prop traders can not join a prop trading firm as a husband wife general partnership; that is one limitation. I can look into the idea of a HW general partnership reporting one spouses K-1 received from a prop trading firm. No promises on that yet.

Robert Green, CPA
GreenTraderTax.com
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this is starting to sound a little like the olde "charles givens tax tricks" where he would have you employ your children , wife, et al for tax benefits. a little too close to line for my tastes.

best,

surfer:)
 
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