What are the benefits from starting a corporation

[galiano]

Quote from Matt8200:

You are going about it wrong, you form a corporation that acts as a management company for trading accounts. It manages your account and charges you a fee for it. Then all deductions flow through the corporation. You make the corporation show a profit too, that way it cannot be deemed as a hobby.

Yes!! And in case of SMLLC, you, the administrator of the LLC are paid wages for administration. LLC reports wages paid on sched C, you, the admin, then report the wages and file a second sched C for administration work. Now you have LLC deductions, AND an AGI (less then the gross wages paid )on which SE taxes are paid... You've just unlocked all possible tax benefits and savings!

 

[progers82]

michael, your probably right about that. the average person just wouldn't want to do all the necessary meetings, paperwork, voting, segregated checking accounts without any mingling of funds.
by the way, i looked at that legalzoom website. thats kind of a cool place.

 

[Matt8200]

Corporations don't offer any protection, LLCs are a different story.

 

[ElectricSavant]

Someone told me that this set-up is good when you reach the 100k a year in profits mark...would that be a fair assessment?

Michael B.

Quote from galiano:

Yes!! And in case of SMLLC, you, the administrator of the LLC are paid wages for administration. LLC reports wages paid on sched C, you, the admin, then report the wages and file a second sched C for administration work. Now you have LLC deductions, AND an AGI (less then the gross wages paid )on which SE taxes are paid... You've just unlocked all possible tax benefits and savings!

 

[ElectricSavant]

Its easy and cheap to form a corporation...who needs atty's?

Quote from progers82:

michael, your probably right about that. the average person just wouldn't want to do all the necessary meetings, paperwork, voting, segregated checking accounts without any mingling of funds.
by the way, i looked at that legalzoom website. thats kind of a cool place.

 

[Matt8200]

Quote from galiano:

Yes!! And in case of SMLLC, you, the administrator of the LLC are paid wages for administration. LLC reports wages paid on sched C, you, the admin, then report the wages and file a second sched C for administration work. Now you have LLC deductions, AND an AGI (less then the gross wages paid )on which SE taxes are paid... You've just unlocked all possible tax benefits and savings!

"How it works:


Limited partnerships have two types of partners: limited partners, who are investors and have no management authority over partnership affairs; and general partners, who control the activities of the partnership. The brokerage account is held inside the limited partnership (a family limited partnership is nothing more than a limited partnership owned by a family). The limited partnership is managed by its general partner, which is typically the corporation. The individual trader, and potentially his family members, would be the limited partners.

The corporation would pay for expenses of trading and seek reimbursement from the limited partnership. The corporation could also charge a management fee to the limited partnership to split monies between the individuals and the corporation. The corporation would also be entitled to a small percentage (usually 1%) of the profits earned in the limited partnership. The end result is that you are generating a tremendous amount of legimate business deductions by virtue of using the corporation as the management company.


In the end, you have a great deal of control over what income actually flows onto your individual tax return. The monies you receive as a limited partner remain unearned and not subject to self-employment tax and can be either long-term or short-term. "
http://www.alglaw.com/stockinvestors.htm

 

[galiano]

Matt8200...

SMLLC = Single Member LLC = No partners, only you.

 

[Matt8200]

Thats why you use a LLC not a SMLLC. I never said to use a SMLLC.

 

[progers82]

i understand exactly how these work. but ill go back to another gentlemen who posted unless you have 100,000 net profit, its just not worth it. its just not worth all the extra paperwork, accounting work, legal work. its just not worth it. i did corp. limited partnership and llc returns for years. unless your very profitable, just not worth it. we are going around in circles. there are alot of lawyers you want to sell you these configurations and if you have the money and profits, i guess no harm but the bottom line is I wont pay anymore taxes that you.

 

[galiano]

Quote from Matt8200:

Thats why you use a LLC not a SMLLC. I never said to use a SMLLC.

Why mess things up, unless you have specific reasons, with other members? Done correctly, SMLLC provides all the bennies.

Cheers.