LLC tax return

S

SideShowBob

I started an LLC last year with my father, elected MTM for securities only, and traded 90% futures.

I'm getting ready to file an LLC return -- from what I understand it's a partnership return (for a multi-member LLC) which passes through gains/losses.

My question is -- are there any "gotchas" for filing the return? The LLC made about 40 stock trades (mostly in December when I started trading a new system for equities) and around 1000 futures trades, most not held overnight (the longest holding period for a future was about 6 days).

I'd like to avoid paying $1500 to a CPA when it's mostly single line item futures trades, but on the other hand I want to make sure the LLC gets trader status.
 
Get Green's book. I am going through it right now. In addition if you get his "gold" package = $99. You get access to website that has sample tax returns.

As I understand it, trader tax status is not something you file like MTM. You have to know if you qualify by your trading activity. Looks like you qualify.
 
I believe if you are trading via a LLC or Corporation. It is already MTM. A corporation doesn't have to apply for trader status.

One thing regarding trading under your LLC. You have to pay fica tax (an extra of 15%) for your profit as a managing member of the LLC.
 
I read Green's book awhile ago, I guess I better dig it out. As an entity, you're saying the LLC doesn't need to worry about MTM or trader status-- I can automatically deduct LLC expenses?

As for FICA both members also have other jobs which take care of a lot of our FICA, so we're only paying the 15% on the difference.
 
Quote from SideShowBob:

I read Green's book awhile ago, I guess I better dig it out. As an entity, you're saying the LLC doesn't need to worry about MTM or trader status-- I can automatically deduct LLC expenses?

As for FICA both members also have other jobs which take care of a lot of our FICA, so we're only paying the 15% on the difference.
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I believe you still have to pay half of the SS, even you pay SS with your other job.

In the following thread, there are some info regarding LLC.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=85289&perpage=6&pagenumber=10

Post questions there. Perhaps traderstatus can give you more insights.
 
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