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In a message dated 7/24/01 9:44:50 AM Pacific Daylight Time, fritz@xxxxxxxx
writes:
> > No, not Sub S; C corporation is the only way to go"formalizes" the
> > business entity (as opposed to a pass-thru which has all the IRS
> > code limitations of trading as an individual) so that "trader
> > status" is no longer an issue.
>
> However with a C corp you are in danger of double taxation. C corps
> must pay taxes on their income, then they can pass on income to you,
> and you pay taxes on it again. S corps pay no taxes and just pass
> the income through to your personal return.
>
> Gary
It takes some work to make the C corp function well. Typically they have high
expenses - quote feeds, computer and tv equipment (for CNBC), home office
rental space, isp feeds, out-of-town trading conferences, books, magazines,
it all adds up. Then usually lots of perks and incentives to retain the
corporation's valuable executives - leased vehicle, subsidized meals during
the workday, generous health plan and life insurance, college reimbursement
plan if applicable, scholarship plan for employees' children, tax-deferred
(to the employees) pension and profit sharing plan, a few parties and
excursions for the employees if business is good. Not to mention salaries and
bonuses. With all those expenses it's a wonder the corporation can manage to
turn a profit at all.
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