Can someone explain as to what are LLC (Limited Liability Company); EIN (Employer ID Numbers) and JBO? How are they related to trading?
The business of Trading
- Thread starter bathrobe
- Start date
An LLC provide the same liability protection and anonymity as a corporation but are easier to maintain and not subject to Corp taxes. EIN is a federal tax number that's required for any company.
Quote from bathrobe:
Don, I am a retail trader. I trade financial futures (my brother still has 1 year left of university, then he will join me). I read an article in futures magazine or active trader magazine a few months ago that made this seem like a logical choice (LLC or INC). LLC seems like it would be a terrible choice, especially for futures traders. Would an ein be a good idea for me? I recently had to move to Scottsdale, AZ and cannot find any lawyers or cpa's with knowledge of what is best for traders
Thank you
It really depends on whether you're planning on staying as simply retail type traders. Check Traders Accounting in Phoenix. They can help you with retail details.
Don
Thank you, minioptions, for the explanations, can you please explain JBO?
I have no idea what JBO stands for.
DISCLAIMER: I AM NOT A TAX LAWYER, AN AMERICAN CITIZEN, OR SOMEONE WITH ANY LEVEL OF SYMPATHY TOWARDS THE 'AMERICAN SYSTEM'. I DO NOT LIVE, WORK, FUCK, OR ANYTHING IN THE U.S., I HAVE ABSOLUTELY NO KNOWLEDGE OF WHAT AMERICAN LAWS AND EFFING TAX REGULATIONS REQUIRE YOU TO DO, NOR SHOULD I HAVE ANY EXPERIENCE IN THE AFORE MENTIONED.
bathrobe, have you looked into creating an LLC outside the US? An obvious advantage would be much, much, much lower taxes, and vastly increased privacy, thus higher levels of asset security. Seems like something obvious (to me) to consider.
DISCLAIMER: I AM NOT A TAX LAWYER, AN AMERICAN CITIZEN, OR SOMEONE WITH ANY LEVEL OF SYMPATHY TOWARDS THE 'AMERICAN SYSTEM'. I DO NOT LIVE, WORK, FUCK, OR ANYTHING IN THE U.S., I HAVE ABSOLUTELY NO KNOWLEDGE OF WHAT AMERICAN LAWS AND EFFING TAX REGULATIONS REQUIRE YOU TO DO, NOR SHOULD I HAVE ANY EXPERIENCE IN THE AFORE MENTIONED.
bathrobe, have you looked into creating an LLC outside the US? An obvious advantage would be much, much, much lower taxes, and vastly increased privacy, thus higher levels of asset security. Seems like something obvious (to me) to consider.
DISCLAIMER: I AM NOT A TAX LAWYER, AN AMERICAN CITIZEN, OR SOMEONE WITH ANY LEVEL OF SYMPATHY TOWARDS THE 'AMERICAN SYSTEM'. I DO NOT LIVE, WORK, FUCK, OR ANYTHING IN THE U.S., I HAVE ABSOLUTELY NO KNOWLEDGE OF WHAT AMERICAN LAWS AND EFFING TAX REGULATIONS REQUIRE YOU TO DO, NOR SHOULD I HAVE ANY EXPERIENCE IN THE AFORE MENTIONED.
Joint Back Office. Like we have a JBO with Goldman Sachs, so they do all the accounting etc. for us.
Don
Thanks, but we double check everything, and have since 1978, LOL. And, I agree that it's necessary!
I really don't think anything is intentional, but with so much going on with billions of shares trading, "stuff" hapens.
Don
I set an LLC for trading.
Advatages I see ...
I will be desginating the accounting for the company an mark to market. From what I have read this will resolve some of the issues the IRS has with people running their trading profits and losses through their personal tax return. Using an LLC also helps with the issue of writing off losses (GULP!) if there are any and the issue of wash sales.
Also traking profits and losses and documenting them, IMHO, is much easier if kept in a sperate business enity. The ability to have a seperate bank account, expenses, etc if that audit ever comes make me feel better.
In New Mexico, where I live, setting up a LLC cost $50 and you are up in running. An LLC does not, in NM, require a board of directors, board meetings, board minutes, and profits and losses are run back into your own 1040.
Currently business taxes are at 35% for most businesses so that is probably higher then what most people are paying personally ... but McCain is talking about reducing the business tax rate to 25%, if elected, so that might change the LLC vs small corp equation for some.
For any business the other advantage of forming an LLC is libility protection. In this case, the issue of libility was not the important issue for me ... if I loose money I guess I can sue myself.
The usual disclaimer ... I'm not a tax attorney
Hope this helps with your decision ...
CFMTrader
Advatages I see ...
I will be desginating the accounting for the company an mark to market. From what I have read this will resolve some of the issues the IRS has with people running their trading profits and losses through their personal tax return. Using an LLC also helps with the issue of writing off losses (GULP!) if there are any and the issue of wash sales.
Also traking profits and losses and documenting them, IMHO, is much easier if kept in a sperate business enity. The ability to have a seperate bank account, expenses, etc if that audit ever comes make me feel better.
In New Mexico, where I live, setting up a LLC cost $50 and you are up in running. An LLC does not, in NM, require a board of directors, board meetings, board minutes, and profits and losses are run back into your own 1040.
Currently business taxes are at 35% for most businesses so that is probably higher then what most people are paying personally ... but McCain is talking about reducing the business tax rate to 25%, if elected, so that might change the LLC vs small corp equation for some.
For any business the other advantage of forming an LLC is libility protection. In this case, the issue of libility was not the important issue for me ... if I loose money I guess I can sue myself.
The usual disclaimer ... I'm not a tax attorney
Hope this helps with your decision ...
CFMTrader