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The Parasite Class
- Thread starter futurecurrents
- Start date
Quote from jem:
first of all if you owned a business... as I do, I pay rent. part of ther reason rent is high is because property taxes on the buiding are high.
in california corporations pay taxes of around 800 dollars or a percent of receivables...I narrowly avoided a huge tax bill when I owned a trading business.
licensing phone costs and gas are not fixed costs when you have to scale up by hiring employees or independent contractors.
Myself and a friend just tried to scale up through Independent contractors. We both concluded we need to control the people more...
for him it meant buying a car... phone... all the other expenses.
For me... I concluded the costs are not worth it at the moment but I will next year.
part of the reason my rent is high is because of the property taxes.
I have owned my own businesses since 1992.
I have done my own taxes most of that time... but when the trading firm was kicking ass I had an accountant.
I don't want to get into this too much but as an attorney I advised clients to recharacterize 1099s from their llc as cap gains instead of income. It was audited.. it worked I saved about 10 people a few hundred thou in taxes over a few years...
I know part of the tax code very well... It happens to be business expenses...
PLus I have been on pbs disclosing foreclosure and foreclosure tax liability.... which may be about to change.
Also when I try to hire someone to do some work in LA. .
they need gas money and wear and tear on their car.. and everything else. As you add up taxes... it makes less and less sense to invest your time and money in a venture.
One of my clients is a house flipper when he has to raise money... the people investing look at after tax profits.
Only people who don't own businesses think you should go raising taxes on small businessmen.
Have you thought about moving out of California? I know it's a beautiful place, but I doubt the extra money making potential can overcome the costs involved. I would understand either way.
I charged a few people for a consultation on this when they were setting up their own llc... ... but that was years ago...
when you make a living trading... as I did, you have an incentive to not want to pay 15 percent fico correct? (perhaps not if you are making really good money and set up retirement accounts that let you put away a ton tax free--- so you find it worth it to pay the 15 percent on your first 80 grand for whatever the cut off is.)
if a guy were a meat salesman and he had big truck full of meat...
and all of a sudden meat became worth twice as much ... would he want to report that profit on the appreciation of the meat as income or gain.
He saves 15 percent on fico and may also save money if the gain is taxed differently than income as well.
(one other thing to consider is setting up a fund... where a person gets a trader salary.... then you also have to consider where the res of the fund should be located... but all that can get very complicated. Ask Soros or GE.
Now the IRS has exceptions to this..
if you are a dealer... they want you to call it income.
I found the definition of dealer. We had licenses and looked like dealers except for one important thing. We sold to the NYSE specialist... not the public.
One my clients (in this case a trader in my office) was audited.
He went in with the case law and the definitions and was in and out very quickly.
when you make a living trading... as I did, you have an incentive to not want to pay 15 percent fico correct? (perhaps not if you are making really good money and set up retirement accounts that let you put away a ton tax free--- so you find it worth it to pay the 15 percent on your first 80 grand for whatever the cut off is.)
if a guy were a meat salesman and he had big truck full of meat...
and all of a sudden meat became worth twice as much ... would he want to report that profit on the appreciation of the meat as income or gain.
He saves 15 percent on fico and may also save money if the gain is taxed differently than income as well.
(one other thing to consider is setting up a fund... where a person gets a trader salary.... then you also have to consider where the res of the fund should be located... but all that can get very complicated. Ask Soros or GE.
Now the IRS has exceptions to this..
if you are a dealer... they want you to call it income.
I found the definition of dealer. We had licenses and looked like dealers except for one important thing. We sold to the NYSE specialist... not the public.
One my clients (in this case a trader in my office) was audited.
He went in with the case law and the definitions and was in and out very quickly.
Quote from bigarrow:
recharacterize 1099s from their llc as cap gains instead of income
jem what does this mean?
Quote from mrbill:
Have you thought about moving out of California? I know it's a beautiful place, but I doubt the extra money making potential can overcome the costs involved. I would understand either way.
I tried... my wife and I moved the family to florida.
I lost a lot of money in real estate there. I had four houses and had to bring money to the table on one them because I did not want to owe the lenders money right before we moved back here.
While I was there... I was not able to make as much money. Although I am from the east coast... I never really liked doing business with people from certain areas of the east coast. I think they also sensed I was not impressed by their approach to things.
For instance my sons friends dad was head AL scout for one of the top teams in baseball. He was giving the kids on the team batting and fielding tips. And this guy from the north east the little league coach... says no no no thats not how you do it... you have to hold your elbow up and squish the bug.
I nearly fell of my chair...
Here these kids were getting the very best training from a guy who studied the movements and was exposed to the very best batting coaches.... and we had this numbnuts retired firemen with a yankees jersey saying no no no.
Note you don't squish the bug you create rotational forces by driving through the ball with your legs.
Elbow up might be OK but the scout told me during the swing you have to develop some lag and power with a power A position. Which means the elbow comes down... so starting with it up is not important.
Also note.
I really like the people in North San Diego.
I love the weather... and I enjoy what I am doing.
I just had a great year business wise.
Perhaps that is why I dont want things to change.