Pros and Cons: LLC vs S-Corp

NoDoji · Mar 15, 2009

Quote from TraderZones:

The only sane way to do this, it to be "unemployed" and put all gains under cap gains, not as income.

This is what our accountant advised us last year because we were just starting out.

Quote from Redneck trader:

The Corp allows me to set up a 401Ks for my wife and myself and trade them (tax deferred of course) No shorting only longs, which include longs on a short ETFs

The Corp allows me to set up medical accounts

We have a dormant S Corp, and I look forward to making significant enough money in the near future that we can use it for the exact reasons above.

sandygray66 · Mar 15, 2009

Quote from jnorty:

.....also if you trade futures you lose the 60/40 benefit i believe.

This is news to me....can anyone else verify or deny this?

Sky123987 · Mar 15, 2009

Quote from sandygray66:

This is news to me....can anyone else verify or deny this?

news to me too

Redneck · Mar 15, 2009

Quote from saliva:

Redneck,

That's very interesting setup you have. But would you please explain what you mean by "We have a Corp managing the LLC"?

By this, are you currently operating under both LLC and x-Corp? That sounds really complicated but obviously you know this stuff more than me. Again, would you provide more detail on what the tax benefit might be under such an elaborate structure?

Thanks.

I never meant to air my business affairs to the world

But to keep it real

Realize I have it setup this way to manage money (I'll leave it to you to decipher this)

Me & My Wife- owns
100% of Corp.
90% of LLC
Files appropriate personal tax form

Corp
Gets all benefits allowed by law
Owns 10% of LLC
Is paid to manage the LLC
Receives all profit from LLC (profit does not = all money made)
Files appropriate business tax form

LLC
Gets all benefits allowed by law
Hires me to trade
Issues appropriate tax form

Without going into specifics this is the layout

I would ask y'all to do the due dilligence for your own situation

I still believe an LLC is the way to go for most

Redneck

Sky123987 · Mar 15, 2009

Quote from Redneck trader:

I still believe an LLC is the way to go for most

Redneck [/B]

I think so too, but the key is you have to elect to have an LLC taxed as an S-Corp. Also, the IRS really needs $ and they are putting a lot of money auditing business. Make sure that you have at least 2 people in the LLC, or else YOU WILL NOT GET THE TAX ADVANTAGES OF THE LLC. If you are a single memeber LLC you will not have the ability to elect to tax yourself as an S Corp where you save a TON on the self employment tax, hence you will have to pay self employment on 100% of monies.

Sky123987 · Mar 15, 2009

Redneck... just curious but did traders accounting sell on you on this?

Redneck · Mar 15, 2009

Quote from Sky123987:

Redneck... just curious but did traders accounting sell on you on this?

Yes Sir, and my Wife and the Tax Lawyer agreed

And I agree with your previous post 100%

saliva · Mar 15, 2009

Quote from Sky123987:

Redneck... just curious but did traders accounting sell on you on this?

Speaking of Traders Accounting, I'm thinking of purchasing two of their products:

Has anyone bought these CDs? Are they worth it? They sound quite convincing nonetheless and $150 for both is practically a pocket change. I make or lose more than that in a single tick move.

Redneck · Mar 15, 2009

Quote from saliva:

Speaking of Traders Accounting, I'm thinking of purchasing two of their products:

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FWIW

I have no clue Sir

saliva · Mar 15, 2009

Quote from Redneck trader:

FWIW

I have no clue Sir

From their website, it appears that they assess your overall financial health and make specific recommendations on what course you should take. This also includes whether you should go the route of LLC or S-Corp. But since I had no prior experience with their service, I'm obviously a little hesitant.