Incorporating as a personal day trader

[wrbtrader]

It is not a loophole. You or anyone can start an LLC. Register with your state, get an EIN from the IRS. Create an operating agreement. Single member LLCs are considered the same to the IRS and a sole prop. You should contact an accountant or Green Trader Tax to determine if for your situation, if it is worth the extra cost for your business. I have a number of clients that have LLCs. They can write off some expenses, create a pension plan, get health insurance, etc and protect your personal assets.

It is a big decision, I would not make it from information you read here,

I hope the OP makes a good decision...trader tax status, LLCs, sole prop or whatever.

 

[eaglefeather]

For us small time guys.....being classified as an investor rather than an entity is better in the US, IMO.

 

[viruscore1]

Of course tax people will say you need LLC but it's just another expense you don't need while starting out.

 

[Stocktracker]

If 90% of your income at the end of the year is from investments, does that not automatically qualify you for trader status?

Also for 2017, will the Trump tax plan be retroactive?

Here is some food for thought for you!
http://www.traderplanet.com/articles/view/165392-a-recent-court-ruling-on-trader-tax-status/
https://greentradertax.com/trader-tax-center/trader-tax-status/how-to-qualify/