LLC, which expenses are deductible?

E

EqtTrdr

I currently have an LLC formed and it solely earns its capital from trading......

Just wanted to know if any of the following items would be considered an acceptable deduction........

Head Trader/President wants to attend a trading seminar/expo. He decides to take his g/f on a trip to the conference. They both fly first class/travel to the seminar/expo.

A hotel suite is booked to stay 1 night if local and 1 day event, or 5 days if a week long seminar. . . Only the head trader attends the seminar/expo. The trader and his g/f then go out to eat all meals, breakfast, lunch and diner . Stay overnight(s) in the hotel "suite" and travel back when the seminar/expo is complete.


Are any of the above items a legitimate business expense??

Seems to me the only thing that would not be considered acceptable is the cost of travel for the "g/f"


Any input is appreciated,

thanks
-Matt-
 
Quote from gotta_trade:

That is a very basic question. Call or e-mail your accountant (or any other accountant), and you will have the correct answer.
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I would but he is away right now on some family matters and will not be back till end of next week, so I was wondering if anyone here had a somewhat educated guess/answer to the post
 
You're asking about a significant deduction and there is a non-negligible chance it will be audited. Are you going to rely on what I or other ET members say? I wouldn't. I suggest you try www.irs.gov and find the relevant publication.

My educated guess is that none of your girlfriend's travel or meals are deductible. Your travel, lodging, and meals are. As I recall, meals will end up being only 50% deductible as you work through the tax form.

Let us know if this is correct.
 
thanks for the responses, I will find out from my accountant before any plans are made, of course.

Just wondering if anyone had any previous experience or ideas regarding the matter...

thanks
 
This doesn't sound too complicated;
Robert Green might gladly answer it for free
[he's always looking for future business of course].

greencompany.com
 
Quote from EqtTrdr:

I currently have an LLC formed and it solely earns its capital from trading......

Just wanted to know if any of the following items would be considered an acceptable deduction........

Head Trader/President wants to attend a trading seminar/expo. He decides to take his g/f on a trip to the conference. They both fly first class/travel to the seminar/expo.

A hotel suite is booked to stay 1 night if local and 1 day event, or 5 days if a week long seminar. . . Only the head trader attends the seminar/expo. The trader and his g/f then go out to eat all meals, breakfast, lunch and diner . Stay overnight(s) in the hotel "suite" and travel back when the seminar/expo is complete.


Are any of the above items a legitimate business expense??

Seems to me the only thing that would not be considered acceptable is the cost of travel for the "g/f"


Any input is appreciated,

thanks
-Matt-
More...

Ask your accountant etc. FYI as far as I know the proper way to go here is to ONLY deduct expenses that you, as an employee of the firm incurr in the course of executing the firms business. Ask your accountant ...
 
A little off subject, but kudos to you for setting up this LLC. Anyone with big exposure to the market, i.e. writing naked options or covered spreads, etc. should do this.

You can PM me on this inquiry, or anyone with insights drop it here. Is it hard to find lenders or creditors at this stage of the game for an LLC in the trading business?? It seems that everyone overlooks the credit of/or the company history itself, unless it is an extensive history with allot of creditor/lender transactions, verifiable tax returns, etc.

The only interest they have is in your personal credit or a personal guarantor signing on for loans or credit cards. Obviously if you, the individual who set up the LLC has minimal debt, good credit history, verifiable cash, etc., circumstances may be a bit more relaxed. Also anyone find institutions readily available to leverage you with stock loans, etc. And what if you have antiques or other assets stockpiled. How can you leverage this into some kind of liquid function such that you could have cash for your trading LLC.
 
Quote from EqtTrdr:

I currently have an LLC formed and it solely earns its capital from trading......

Just wanted to know if any of the following items would be considered an acceptable deduction........

Head Trader/President wants to attend a trading seminar/expo. He decides to take his g/f on a trip to the conference. They both fly first class/travel to the seminar/expo.

A hotel suite is booked to stay 1 night if local and 1 day event, or 5 days if a week long seminar. . . Only the head trader attends the seminar/expo. The trader and his g/f then go out to eat all meals, breakfast, lunch and diner . Stay overnight(s) in the hotel "suite" and travel back when the seminar/expo is complete.


Are any of the above items a legitimate business expense??

Seems to me the only thing that would not be considered acceptable is the cost of travel for the "g/f"


Any input is appreciated,

thanks
-Matt-
More...


I can tell you that any expenses associated with your girlfriend will not be deductible, unless she is an employee of the LLC(something to look into). As for the meals, meals and entertainment expenses are usually 50% deductible. You should talk to a CPA.
 
Thank you so much for the fantastic information, it is truely appreciated !!!!

-Matt-




Quote from GreenTraderTax:[/i



Dear Matt:

A trading business LLC or sole proprietor business trader, both qualified as being in the business of trading (trader tax status) may deduct business travel and seminar expenses.

However, the IRS has many specific rules to disallow personal travel and extravagant expenses.

Start at www.irs.gov. Search travel expenses. See Topic 511 - Business Travel Expenses.
http://www.irs.gov/taxtopics/page/0,,id=16239,00.html

Excerpt: "You cannot deduct expenses that are lavish or extravagant or that are for personal purposes. Also, you may not deduct travel expenses at a work location if it is realistically expected that you will work there for more than one year, whether or not you actually work there that long."

Note: In an exam, IRS agents like to focus on travel, meals and entertainment. Lot's of taxpayers are overly aggressive here and the IRS knows it.

definitely take your proper travel and seminar expenses, but don't be greedy, unless you don't mind giving something back to the IRS in an exam.

Take care,
Bob
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:D :D
 
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