Let's say I create a LLC or S corp in April, can I deduct against personal capital gains I have already made when I closed out my short term personal gains from January until March? If I made 300k from January until March, can I start a LLC/ S corp and deduct retroactively the gains I already made in my personal account? Or will it only apply to the LLC gains since it is a separate entity with another tax ein number?
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In a LLC/ s corp in California, can you retroactively deduct against personal gains?
- Thread starter dtryan
- Start date
I think you might be missing the bigger picture of how a S Corp or LLC work. Everything is passed through to the members, so from a tax perspective a capital gain or loss in an S Corp where you are the sole shareholder is identical to a capital gain or loss in your personal account. So yes, you would be able to net all your gains and losses in a year regardless of if they stemmed from a passthrough entity or your own account.Let's say I create a LLC or S corp in April, can I deduct against personal capital gains I have already made when I closed out my short term personal gains from January until March? If I made 300k from January until March, can I start a LLC/ S corp and deduct retroactively the gains I already made in my personal account? Or will it only apply to the LLC gains since it is a separate entity with another tax ein number?
I think you might be missing the bigger picture of how a S Corp or LLC work. Everything is passed through to the members, so from a tax perspective a capital gain or loss in an S Corp where you are the sole shareholder is identical to a capital gain or loss in your personal account. So yes, you would be able to net all your gains and losses in a year regardless of if they stemmed from a passthrough entity or your own account.
Thank you, so what would be the point of a LLC / s corp if the gains and losses are treated the same? I made 300k so far this year and I am just trying to lower the tax I pay. I am 30 years old and have a private health insurance plan so not sure how it would benefit besides a retirement plan. I do not have many trading expenses and do not pay for software or margin fees. I only could deduct a home office I think?
You pretty much summed it up. The benefits aren't huge and it's a bit of a PITA.Thank you, so what would be the point of a LLC / s corp if the gains and losses are treated the same? I made 300k so far this year and I am just trying to lower the tax I pay. I am 30 years old and have a private health insurance plan so not sure how it would benefit besides a retirement plan. I do not have many trading expenses and do not pay for software or margin fees. I only could deduct a home office I think?
They've got a minimum franchise tax that makes it even worse, from what I remember.Just wondering why so many people do it then. Will it help me if I live in California?