LLC Brokerage Account

C

chuzek

Could people discuss the benefits and drawbacks of opening a stock brokerage account as an LLC?

Wouldn't personal funds provided to the LLC for trading be tax deductible business expenses? Wouldn't all retained earnings be tax free until distributed to member(s)? So one could essentially defer taxes until a later date and reduce personal income tax at the same time?

Thanks
 
Quote from chuzek:

Could people discuss the benefits and drawbacks of opening a stock brokerage account as an LLC?

Wouldn't personal funds provided to the LLC for trading be tax deductible business expenses? Wouldn't all retained earnings be tax free until distributed to member(s)? So one could essentially defer taxes until a later date and reduce personal income tax at the same time?

Thanks
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sure, but you reduce personal income too.
 
Wouldn't personal funds provided to the LLC for trading be tax deductible business expenses?
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why? those funds are still your money and you can take them back from LLC at any time...
i'm no tax expert,but i do have an llc for trading.the only advantage i see is ability to deduct certain expenses.the ones that are misc. expenses for individuals and subject for 2% floor.
that's about it. maybe some "asset protection" bs.
i did not see how you cab reduce your personal tax liabilities, using LLC
maybe...maybe.. if you put in this LLC bunch of poor relatives,who is in lower tax brackets than you are. this may save you few $
 
Quote from Bob111:

why? those funds are still your money and you can take them back from LLC at any time...
i'm no tax expert,but i do have an llc for trading.the only advantage i see is ability to deduct certain expenses.the ones that are misc. expenses for individuals and subject for 2% floor.
that's about it. maybe some "asset protection" bs.
i did not see how you cab reduce your personal tax liabilities, using LLC
maybe...maybe.. if you put in this LLC bunch of poor relatives,who is in lower tax brackets than you are. this may save you few $
More...

Likewise, I'm not tax expert either. I suppose you'd only be able to deduct commissions and possibly any losses that are realized.

I think the benefits would arise from being able to defer taxes on gains by keeping them as retained earnings within the LLC. So if one wanted to retire in 10 or 20 years, you would have a lower personal income and it would then be better to pass on the gains.
 
Quote from CaliforniaKid23:

I think if you own 50% of an llc, 50% of the LLC's profits are your profits and therefore you pay taxes on those profits.
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True. But say you owned 100%. If you didn't want to accept the profits for a given year, you can defer them for a later date that may be more beneficial.
 
Does it mean that by deferring the profit to the later date and instead of paying taxes you may reinvest that portion and make more profit, assuming you goanna make money trading the "tax portion money"?
 
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