[RT] Best Tax-Advantaged Way for an Individual Trader

[CalaxCorp@xxxxxxx]

Brian:

Using a separate entity may provide some additional advantages.  For those 
individuals who have too much "other income", they may not qualify to file 
under "trader status".  Having a separate entity (e.g. a S-corp) would be one 
way to separate the types of income between the entity and the individual.  
Another benefit is certain expenses can be paid from the entity as business 
expenses which otherwise would not be deductible on the tax returns of the 
individual.

Earl is right about pension plans requiring earned-income (being subject to 
social security tax) for calculation of funding and deductions.  However, the 
benefits of tax-deferred compounding and accumulation of trading profits 
inside the pension plan may outweigh the initial SS tax.

Costs vs benefits depend on your own situation.

Bill W...
>>>>>>>>>>

> Subj:  [RT] Re: Best Tax-Advantaged Way for an Individual Trader
>  Date:    9/28/00 5:26:16 AM Pacific Daylight Time
>  From:    eadamy@xxxxxxxxxx (Earl Adamy)
>  
>  Assuming you trade futures, 60% is taxed as long term and 40% as short
>  term regardless of holding time and by filing as a trader, you can
>  deduct all expenses and income is not "earned income" and therefore not
>  subject to employment taxes so there is little reason other than pension
>  planning considerations to elect an alternative entity. Pension planning
>  requires earned income and you can set things up so you can pay the
>  hefty employment taxes and contribute to a pension.
>  
>  Earl
>  
>  ----- Original Message -----
>  From: "Brian Keith Voiles" <admagic@xxxxxxxx>
>  To: <realtraders@xxxxxxxxxxxxxxx>
>  Sent: Wednesday, September 27, 2000 4:09 PM
>  Subject: [RT] Best Tax-Advantaged Way for an Individual Trader
>  
>  
>  > RealTraders,
>  > I day trade the S&P 500.  What I'm wondering is it better to
>  > set-up an S-Corp and trade under that umbrella and take my
>  > pay from the corporation as an employee?  Or is it better to
>  > trade as an individual?
>  >
>  > Any suggestions are welcomed.
>  > Thanks,
>  > Brian Voiles
>  >
>  >