Legality trading under-age?

K

Kylash

Hey everyone, even though I've been visiting the site for several months now, as you can tell, this is my first real post.

Anyway, I've got a question in regards to the legality of a "minor" trading commodious.
So right now I'm only 15, but I have an interest in trading futures (specifically ES) over the summer (when I'm not in school of course). My question is; would it be legal for me to have a brokerage account and trade under one of parents' names?

I've tried to do as much research as possible but I still have not found a clear answer. I assume, no one would really be able to tell whether it was me or my parents trading (Assuming all gains taxes were filed under my parents name). Right?
 
If I were you I would trade on a SIM account untill you're old enough. Trading is tough it's tougher than working in a cubicle sucking up to an ugly bitch and that says alot.
and if you spent too much time chasing the dream, you will regret it.

when now you can still enjoy your youth and chase the pussy. trust me, I started trading too early and paid dearly for it.

ofcourse being young can be an advantage just don't spend more than 3 hours a day untill youre old enough. don't be like me still a virgin in college. my life is miserable because of trading. DON"T BECOME A TRADER.

let me put it this way, you WILL KNOW the sacrifice it takes to become a trader. one way or another it will eat you away and you will have to bend over and take it. . there can be no failure, either succeed or die.
 
Quote from Kylash:

Hey everyone, even though I've been visiting the site for several months now, as you can tell, this is my first real post.

Anyway, I've got a question in regards to the legality of a "minor" trading commodious.
So right now I'm only 15, but I have an interest in trading futures (specifically ES) over the summer (when I'm not in school of course). My question is; would it be legal for me to have a brokerage account and trade under one of parents' names?

I've tried to do as much research as possible but I still have not found a clear answer. I assume, no one would really be able to tell whether it was me or my parents trading (Assuming all gains taxes were filed under my parents name). Right?
More...

I can not possibly see where in any way shape or form it could be a criminal act for you to do so. In fact I can't see how in any way you could be exposing any civil liability either(by merely not being an adult).

The idea as I understand it is that in Wisconsin (and applies in similar fashion in most states ) is that MINORS (technically called infants ) are able to IF THEY CHOOSE to void a contract that is not for essentials. This is to protect minors from being tricked into "unconscionable"/unfair contracts. The net effect is that no one will contract with a minor for any size as they know the minor at any time can void the contract and get their money back (think 16 yr old buying a car like a corvette and smashing it up and calling the dealership that they can pick up the parts off HWY15 and that they will be in later in the day to collect all their money back).

So with that in mind a broker is not going to open a trading account for you on your own. What I think you should be able to do without a problem for a legal point of view is have your parent(s) open a custody account with your name. This should allow you to trade the account (perhaps not a good idea based on the failure rate but that's another thread).

I base this on my own experience as I started trading around 15 or 16 yrs old (now 41) and I called in my orders so things may have changed somewhat but in a world where things happen with a mouse click I would think it would be easier not harder to do what you seek.

Best of luck to you

RW
 
I might add that the tax ramifications may be an issue, in your name. There's a chance it could raise a red flag when reporting gains and losses and an audit may lead to a legal problem regarding your underage status, affecting you, your broker, your parents, or all three. Of course the chances for such actions taking place are probaly slim, but they exist nonetheless. If you place the account under your parents name, then they accept all tax liabilities and you remove the legal component.
 
Silly question, but could possibly child labor laws play some sort of role here? Not like someone's going to easily be able to tell if you've been trading too many hours, but you never know if an audit comes into play.

The only thing I would be very concerned about is if you incurred a debt that your parents would be liable for. It would suck if you hit a nasty margin call and your folks had to bail you out - in essence your debts become theirs. Its one thing to put your own money under fire, but a different matter to put someone else's.

I think Richard Dennis started trading when he was 17 years old, he had to have his dad work at the exchange for him.
 
Quote from Big AAPL:

I might add that the tax ramifications may be an issue, in your name. There's a chance it could raise a red flag when reporting gains and losses and an audit may lead to a legal problem regarding your underage status, affecting you, your broker, your parents, or all three. Of course the chances for such actions taking place are probaly slim, but they exist nonetheless. If you place the account under your parents name, then they accept all tax liabilities and you remove the legal component.
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Its a valid point to think about but the underaged person if they make enough money would just be required to file and pay taxes like anyone else.

The tax rate could depend on the parents tax rate though. Congress saw fit to put kids of high income earners at the same rate as the parents a few years ago.

Lots of people under the age of 18 earn enough to be required to file and pay taxes. Not really a big deal. Think about all the child models and or actors that have to pay. Nothing new in that regard.

Best

RW
 
Quote from Big AAPL:

I might add that the tax ramifications may be an issue, in your name. There's a chance it could raise a red flag when reporting gains and losses and an audit may lead to a legal problem regarding your underage status, affecting you, your broker, your parents, or all three. Of course the chances for such actions taking place are probaly slim, but they exist nonetheless. If you place the account under your parents name, then they accept all tax liabilities and you remove the legal component.
More...

Yes, I thought about that as well. I forgot to mention in my first post that my father and I share the same first name (he's the II and I'm the III). So for my gains (if I'm lucky enough to make any), I'll just simply file them as if they were his (since the brokerage account will already be under his/my name).
 
Quote from college_trad3r:

If I were you I would trade on a SIM account untill you're old enough. Trading is tough it's tougher than working in a cubicle sucking up to an ugly bitch and that says alot.
and if you spent too much time chasing the dream, you will regret it.

when now you can still enjoy your youth and chase the pussy. trust me, I started trading too early and paid dearly for it.

ofcourse being young can be an advantage just don't spend more than 3 hours a day untill youre old enough. don't be like me still a virgin in college. my life is miserable because of trading. DON"T BECOME A TRADER.

let me put it this way, you WILL KNOW the sacrifice it takes to become a trader. one way or another it will eat you away and you will have to bend over and take it. . there can be no failure, either succeed or die.
More...

Thanks for your advice. I agree, I really don't want my trading to ruin any of my summer social life. I sim traded for about two weeks last summer and now I'd really like try out some of strategies with a live account. I think that after I try trading I'll get a better idea of if this is something I'd seriously like to pursue in the future (after high school/college).
 
I traded margin using a custodial account until they made me switch. I'm mean, if mom and dad don't have faith in you, no one else will.
 
2 weeks is nothing kid, sim trade for a year and see where you stand trust me you will thank me later.

and college trader is not right you can be in college and find more than enough time for both a relationship and trading.
 
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