خيارات المتاجرة الأعمال كيان

العوامل والمزايا للنظر في إنشاء منشأة تجارية حماية الأصول من الدائنين أو الخصوم القسم 475 توافر الانتخابات ضريبة الخصومات من القسم 419 خطط الوفورات الضريبية من استراتيجيات التخطيط المزايا الإضافية التخطيط للتقاعد المسموح به كل تاجر فريد من نوعه مع احتياجات مختلفة وأنماط حقيقة مختلفة مثل والأصول والخصوم، والاعتبارات الأسرية، وحالة الإقامة، وما إلى ذلك. يجب أن يكون عملك التجاري وهيكل الكيان مخصصا خصيصا لتلبية ظروفك الخاصة. A سكالبر 29 عاما واحد مع مكاسب 300،000 في السنة لديها احتياجات مختلفة من 45 عاما تزوجت مومنتوم التاجر مع 3 أطفال وظيفة بدوام كامل. والتحليل الدقيق ضروري لتطوير الهيكل المناسب. الملكية الفردية هي الشكل الأكثر استخداما للأعمال التجارية في أمريكا. ويرجع ذلك في المقام الأول إلى أنه من الأسهل إنشاء وتشغيل. ولا توجد طلبات حكومية مطلوبة. قد تطلب منك بعض المواقع الحصول على ترخيص تجاري محلي أو تصريح اسم وهمية إذا كنت تنوي تشغيل النشاط التجاري باسم آخر غير اسمك الشخصي. هذه التراخيص أو التصاريح عادة ما يكون لها رسوم رمزية (25-50) وبالنسبة للشركات التجارية فإنها غالبا ما تكون غير ذات صلة أو ضرورية. الفرد الذي هو تاجر مؤهل ويتداول من خلال حسابات الوساطة في اسمه الفردية يعتبر مالكا واحدا. أنت أيضا تعتبر مالكا واحدا إذا كان لديك حساب مشترك مع زوجك أو أي فرد آخر ولم تقم بإنشاء شراكة أو كيان آخر. الترادربروبريتور لأغراض الضرائب هو الفرد اتخاذ قرارات التداول. ويقرر المالكون الوحيدون دخلهم ونفقاتهم في الجدول جيم الذي يدرج ضمن عائدهم الضريبي على الدخل الفردي 1040. ويستكمل التجار الجدول جيم بشكل مختلف مقارنة بالشركات الأخرى. وتبلغ مصروفات نشاطك التجاري في الجدول جيم. ويظل الدخل مكاسب رأسمالية (بدلا من الدخل العادي)، وبالتالي يرد في الجدول دال. والاستثناء من هذه القاعدة هو بالنسبة للتجار الذين يقومون بإجراء الانتخابات من 475 مارك ماركيت تو ماركيت. إذا تم إجراء هذا الانتخاب ثم يتم الإبلاغ عن الدخل العادي الخاص بك من التداول في نموذج 4797. ويسمح للتاجر مالك وحيد لخصم الدولار مقابل الدولار نفقات التداول. أنت معفى من الحد الثاني لنفقات الاستثمار التي يقتصر عليها المستثمرون في الجدول أ. يمكنك اقتطاع مكتب في منزلك ويمكنك حساب نفقات المعدات القابلة للاستهلاك. في حين أن جميع مصاريف التداول قابلة للخصم بالكامل، هناك بعض القيود على نوع آخر من المصاريف التجارية. على سبيل المثال، لا يمكن للمالك الوحيد خصم تكلفة التأمين الصحي والعجز. واحدة من الأسباب الرئيسية الكثير من الناس اختيار شكل المالك الوحيد من الأعمال هو سهولة التشغيل. كما مدرب الخاصة بك يمكنك أن تفعل أساسا ما تريد، عندما تريد. أنت لا تحتاج إلى الإجابة على المساهمين أو المديرين كما هو الحال مع الشركات، أو للشركاء كما هو الحال مع الشراكات. بالإضافة إلی ذلك، لا توجد إجراءات رسمیة مثل اجتماعات المساھمین أو اجتماعات مجلس الإدارة، الدقائق، متطلبات الإیداع السنویة، إلخ. کما ھو مذکور أعلاه، فإن الشرکات الوحیدة مقیدة فیما یتعلق ببعض المصاریف التي یمکنھا خصمھا. على وجه التحديد، بالنسبة للمتداولين، بما أن دخلك يظل مكاسب رأسمالية في طبيعته، فإنه غير مؤهل للحصول على مساهمات خطة التقاعد (مثل إيراس، سيبس، الخ.). من تجربتي، والمشكلة مع معظم الشركات الفردية الوحيد هو أنه نظرا لطبيعتها غير الرسمية التجار يميلون إلى نسيان أنهم في الواقع الشركات وتفشل في تشغيلها بطريقة تجارية. عدم وجود خطة عمل مكتوبة، وتوثيق القرارات التجارية وخلط الأعمال والأموال الشخصية - دفع النفقات الشخصية من حساب الأعمال يمكن أن تكون بعض المشاكل. حيث يتم دمج شخصين أو أكثر في مؤسسة تجارية يتم تشكيل شراكة. وبحكم التعريف، هناك حاجة إلى شخصين أو أكثر (أو كيانات) من أجل تشكيل شراكة. وتتمثل السمة الرئيسية للشراكة العامة في أنه ترتيب غير رسمي بين الشركاء. مرة أخرى لا توجد متطلبات الإيداع الحكومية اللازمة لتشكيل شراكة عامة - سوف المصافحة بسيطة تفعل. تعترب الرشاكات سركات حتويل التدفقات النقدية من اأجل ا لأغراس السريبية. وهذا يعني أن الشراكة لا تدفع الضرائب ككيان. يتم إيداع الإقرار الضريبي للشراكة لأغراض إعلامية فقط، ويتلقى كل شريك جدول K-1 الذي يخصص الإيرادات والمصروفات لكل شريك على حدة. ويدفع كل شريك ضرائبه على أساس التوزيع النسبي للدخل والنفقات (الأرباح) كما هو مبين في الرتبة K-1. كما هو الحال مع الشركات الفردية، والشراكات العامة هي سهلة التشغيل. ولا توجد متطلبات رسمية لاتخاذ القرارات. إدارة الشركة هي أساسا من خلال الموافقة المتبادلة. وفي حين قد يختار الشركاء وضع شروط اتفاقهم كتابة، فإن ذلك غير مطلوب قانونا. أسهل طريقة لعرض الشراكة هي أنها ملكية فردية بين شخصين أو أكثر. وأهم أسباب عدم تشكيل شراكة عامة هي الآثار القانونية بدلا من الاعتبارات الضريبية. في شراكة عامة يعتبر كل شريك وكيلا للشريك الآخر والشراكة. وبالتالي كل فرد قادر على ربط الفرد الآخر. كيف يؤثر ذلك على المتداولين إذا قرر شخصان تجميع أموالهما وفتح حساب وساطة يسمح لكل منهما بالتداول، فسيكون كل شريك ملتزما بقرارات التداول الخاصة بالشريك الآخر. إذا دخل شريك 1 في تجارة خاسرة، شريك 2 هو من الحظ. بيد أن الوضع قد يكون أسوأ من ذلك. إذا قام الشریك 1 بتداول الحساب علی ھامش، ویخضع الحساب لدعوة ھامش، یمکن أن یطلب من الشریك 2 تسدید کامل مبلغ المکالمة الھامشیة (لیس فقط 50) وھذا صحیح حتی لو لم یکن لدیھ معرفة بالشركاء 1 أفعال. ونظرا لعامل االلتزام هذا وحده، فإننا ال نوصي بشراكات عامة إال في ظروف محدودة جدا جدا. وعندما تكون الشراكة بين شخصين أو أكثر مطلوبة، تكون الشراكة المحدودة هي الكيان المفضل في الاختيار. الشراكات المحدودة هي الهيكل المفضل لإجراء الأعمال التجارية في شكل شراكة على وجه التحديد بسبب قضايا المسؤولية التي نوقشت أعلاه. وتتكون الشراكات المحدودة من واحد أو أكثر من الشركاء المحدودين الذين تقتصر مسؤوليتهم على مبلغ استثمارهم في الشراكات، والشريك العام الذي يتحمل مسؤولية غير محدودة. وللاستفادة من الفصل بين المسؤولية، عادة ما يصدر الشريك العام نسبة مئوية صغيرة جدا من الملكية في الكيان (ربما 1-2) من أجل زيادة الحد من قابلية التأثر بالدائنين. لتشكيل شراكة محدودة يجب عليك تقديم شهادة منظمة في الدولة التي كنت ترغب في تشكيل الأعمال التجارية. اتفاق الشراكة الشراكات المحدودة هي مخلوقات من النظام الأساسي. وقد سنت جميع الولايات قوانين (قوانين) تجيز إقامة شراكات محدودة. ومن السمات الرئيسية للشراكات المحدودة أنها تتطلب اتفاق شراكة مكتوبة. وتنظم هذه الاتفاقات إدارة وتشغيل الشراكة. وتحدد أحكام هذه الاتفاقات الطريقة التي يجوز بها قبول الشركاء أو سحبهم، وطريقة توزيع الأرباح والخسائر، والطريقة التي تتخذ بها القرارات. وبالتالي، فهي أكثر تعقيدا من الشراكات العامة ولكن المزايا تفوق بكثير المساوئ. المعاملة الضريبية تتطلب مصلحة الضرائب إرس إرجاع المعلومات، ومع ذلك، يتم تقسيم إنكوميلوس إلى كل شريك على K-1. وكشركة من خلال التدفق، فإن الشراكة المحدودة نفسها لا تدفع الضرائب. ويحتفظ الدخل المخصص للشركاء بنفس طابع الدخل الذي تحصل عليه الشراكة. وبالتالي، إذا كان دخل المتاجرة هو مكاسب رأسمالية قصيرة الأجل للشراكة فإنه سيتم التعامل معها على أنها مكاسب قصيرة الأجل للشركاء الأفراد. العملية تتمثل السمة الرئيسية للشراكة المحدودة في أن مسؤولية الشركاء المحدودين عن ديون والتزامات الشراكة تقتصر على استثماراتهم المالية. وينشأ هذا التحديد عن فصل الشريك المحدود عن السيطرة على الأصل. وتناط السيطرة بالشريك العام الذي يتحمل مسؤولية غير محدودة. وبموجب النظام الأساسي ووفقا لشروط اتفاقية الشراكة، يكون الشريك العام مسؤولا عن مراقبة أصول الشراكات. وهذا هو، الشريك العام هو الذي يتداول في الواقع الحسابات. ويمكن أن يكون الشريك العام فردا أو كيانا آخر مثل شركة أو شركة ذات مسؤولية محدودة أو شراكة محدودة أو كيان آخر. يجب على الشركاء المحدودين الحرص الشديد على عدم المشاركة الفعالة في إدارة الشراكة أو قد يفقدون حماية المسؤولية المحدودة. وحيث أن هناك حاجة إلى تسجيل شراكات محدودة مع الدولة، فإن هناك لوائح حكومية للتقارير والرسوم التي تختلف من دولة إلى أخرى. عندما يكون جميع أعضاء الشراكة المحدودة أو معظمهم أعضاء في العائلة الواحدة، يمكن تشكيل شراكة عائلية محدودة (فلب). لا يتم تعريف القواعد التوجيهية من قبل النظام الأساسي ولكن بموجب شروط اتفاقية الشراكة. يتم تنظيمها وتشغيلها تماما مثل الشراكات المحدودة كما نوقش سابقا. ویمکن الاطلاع علی السمات المتمیزة للشرکات ذات الصلة في شروط اتفاقیة الشراکة والاستراتیجیات الضریبیة التي یمکن أن تستخدمھا. وغالبا ما تستخدم هذه القواعد لأغراض التخطيط العقاري. ويتمثل أحد أهم هذه العوامل في القدرة على تحويل أسهم الشراكة (والدخل) إلى أفراد الأسرة في أقواس ضريبية أقل، والقدرة على استخدام التقييم المخصوم، وميزة حماية الأصول في طلب الشراء. مع فلب أحد الوالدين يمكن نقل أسهم الأسهم للأطفال وأفراد الأسرة الآخرين الذين هم في شريحة الضرائب أقل. وفي حين أن الدخل الذي يعزى إلى حصص الطفل سيكون خاضعا للضريبة عند معدل الطفل، لا يلزم أن يكون هناك أي حق مناظر للطفل في الحصول فعليا على القيمة النقدية للأسهم. كافيت: احذر من ضريبة الدخل التي بموجبها سوف يكون الدخل على مبالغ عتبة خاضعة للضريبة عند الآباء أعلى معدل للأطفال دون سن 14. بسبب اتفاقات الشراكة قيود على نقل مصالح الشراكة، وكثيرا ما يقال أن صحيح فإن القيمة الحالية للأسهم هي أقل من قيمة الأصول الأساسية. وهذا أمر مهم لأغراض التخطيط العقاري لأنه قد يسمح فعليا لأحد الوالدين بنقل الأصول التي لها قيمة أكبر من القيمة المقدرة للشركاء ذوي القيمة الأقلية المقدرة على الأطفال. من وجهة نظر حماية األصول، قد يكون أمر الشحن هو أكبر سمة من سمات السندات اإلقليمية والشراكات المحدودة من غير األسرة. في الأساس، في حين أن الدائن لشريك محدود قد تكون قادرة على الحصول على شركاء شراكة محدودة الفائدة، وهذا وحده لا يجعل الدائن شريكا محدودا ولا يعطي أي حقوق أي شريك. والأهم من ذلك أن الدائن لا يتلقى الحق في إجبار الشريك العام على توزيع الدخل. وعلى الرغم من أن الدائن لا يتلقى فعلا نقودا من الشراكة، إلا أنه لا يزال يتعين عليه دفع ضرائب على حصة التوزيع من دخل الشراكة. شركة ذات مسئولية محدودة شركات ذات مسؤولية محدودة (ليك) هي في الأساس هجين بين الشركات وشراكات محدودة. على غرار الشركات وشراكات محدودة، أعضاء ليك ذوق مصالح محدودة إلى مقدار استثماراتهم. الشركات ذات المسئوولية المحدودة هي جديدة نسبيا على المشهد الكيان بعد أن قدمت لاول مرة عندما أنشأت وايومنغ أول قانون في عام 1977. حاليا، فهي مأذون بها من قبل كل دولة تقريبا. شركة ذات مسؤولية محدودة لديها خيار للضرائب إما كشراكة أو شركة. كشراكة يتدفق إنكوميلوس من خلال إلى أعضاء الفردية ويتم الإبلاغ عن إقراراتهم الضريبية الشخصية. كما تطبق الشركات معدلات ضريبة الشركات والقواعد. الشركات ذات المسئوولية المحدودة يمكن أن تكون إما عضو واحد أو متعددة الأعضاء في الطبيعة. لأغراض الضرائب إرس يتجاهل عضو واحد الشركات ذات المسئوولية المحدودة وبعض الولايات لا تأذن لهم. التأثير هو أنه في حين أن شركة ذات مسؤولية محدودة عضو واحد قد تتمتع حماية الأصول، وسوف تستمر في أن تخضع للضريبة كمالك وحيد مما يتطلب تقديم جدول C، وفي بعض الحالات على جدول سي الذي يجب أن يكون 15.3 ضريبة العمل الحر المبلغ عنها والمدفوعة. يتم فرض ضريبة على شركة ذات مسئولية محدودة متعددة الأعضاء أشبه بشراكة محدودة، حيث لا يخضع الدخل عموما لضريبة العمل الحر. في حالة إدارة الشركة ذات المسئوولية المحدودة (على عكس كوتماناجر-ماناجيدكوت)، قد يخضع العضو المنتدب لهذه الضريبة. الفرق الرئيسي بين الشركات ذات المسئوولية المحدودة والشراكات المحدودة هو أنه في حين أن شريك محدود قد تفقد حمايته المحدودة المسؤولية عن طريق المشاركة في إدارة الشراكة، ويسمح للعضو في شركة ذات مسؤولية محدودة للمشاركة في الإدارة. وهكذا، يمكن أن تكون شركة ذات مسئولية محدودة إما أن تكون قادرة على إدارة أو إدارة الشركة المدارة. الإدارة وفقا لاتفاقية التشغيل وقوانين الولايات. في حين أن هناك بعض المزايا لاستخدام هذه الكيانات هناك أيضا عيوب. وبما أن الشركة ذات المسؤولية المحدودة هي هيكل كيان جديد نسبيا، فلم يكن هناك عدد كبير من قضايا المحاكم التي تقرر الآثار الضريبية وغير الضريبية لهذا الشكل من الأعمال، على الرغم من أن القوانين أصبحت أكثر تحديدا في هذا المجال. وفي حين أن النظام الأساسي يعكس القوانين الأساسية للشراكة المحدودة في العديد من النواحي، فإن هناك اختلافات كبيرة. ولذلك، يجب إجراء تحليل دقيق والتخطيط على أساس كل حالة على حدة لتحديد ما هو مناسب. هناك نوعان من الشركات: S - الشركات و C - الشركات. جميع الشركات عندما نظمت تبدأ C - الشركات. ويمكن إجراء انتخابات خاصة مع مصلحة الضرائب الأمريكية على النموذج 2553 الذي ينتخب مركز شركة S لأغراض ضريبية، وقد أبلغ عن إقرارات الضرائب الفردية لمساهميها. جميع الشركات (C - و S - الشركات على حد سواء) تشترك في خصائص مماثلة. يتم إنشاؤها من قبل قوانين الدولة وهي الكيان التجاري الوحيد الذي يعتبر ويعامل على أنه منفصل تماما ومميز عن أصحابها (أي المساهمين). فهي الهيكل الأكثر تعقيدا لصياغة والحفاظ عليها وتتطلب أكثر الشكليات لاستمرارها وصحتها. وعلى الرغم من أنه أكثر تعقيدا من الأشكال الأخرى لممارسة الأعمال التجارية، إلا أن المتطلبات لا يمكن إدارتها بأي حال من الأحوال، وفي الواقع، توفر الشركات أكبر المزايا الضريبية للشركات - ولا سيما التجار. C - فيلق الحصول على أوسع مجموعة وأعلى حدود التخفيضات الضريبية من أي كيان تجاري. وهناك قدر أكبر من المرونة في إنشاء 419 صندوقا استئمانيا وخطط تقاعد وخصم نفقات السفر والترفيه والنفقات الدراسية ودفع المصاريف الطبية والتعليمية بالدولار الخاضع للضريبة والفوائد العديدة الأخرى التي لا تتوفر أو تقيد بشدة في أشكال أخرى من الأعمال. إن العيب الأكثر سماعا حول C-كوربس هو قضية الازدواج الضريبي. والحجة هي: ككيان منفصل يخضع دخل الشركة للضريبة على مستوى الشركات ثم يتم فرض ضريبة عليه مرة أخرى على المستوى الفردي عند دفعه كمرتب أو أرباح. وهذا ليس دقيقا تماما لأنه لا يأخذ في الاعتبار أن الرواتب تقتطع من دخل الشركات قبل أن تخضع الشركة للضريبة، وبقدر ما تدفع المرتبات لا توجد ضرائب مزدوجة. ومع ذلك، لا يتم خصم الأرباح من قبل المؤسسة، ولكن من خلال استخدام التخطيط السليم وتنفيذ برامج الشركات، يمكن تجنب أرباح الأسهم والضرائب المزدوجة أو التقليل منها. وحتى في حالة فرض ضريبة على دخل الشركات، فإن معدل الضريبة على الشركات على جميع المستويات أقل من المعدلات الضريبية الفردية على نفس الدخل. مقارنة معدل الضريبة على الشركات من 15 على أول 50،000 الدخل، في حين أن معدل الضريبة الفردية واحد هو 15 في أول 25750 ثم يقفز إلى 28. يتم إنشاء الشركات في جميع الولايات من خلال تقديم مواد التأسيس ودفع الرسوم المطلوبة. وهي محكومة بقوانين داخلية هي الوثائق الداخلية للشركة. الشركات هي إلى حد بعيد الأكثر تعقيدا لإدارة بسبب متطلبات الاجتماعات السنوية والخاصة للمساهمين والمديرين ومتطلبات أن جميع القرارات الهامة توثيقها في قرارات مكتوبة. وهذه الشروط لا يمكن إدارتها بأي حال من الأحوال، وتوجد الشركات التي يمكن أن تساعد الشركات على الامتثال لهذه المتطلبات. وعلى الرغم من أنه يمكن للشركة أن تقوم بأعمال تجارية في أي دولة من البلد، فإن هناك قواعد معقدة تتعلق بالصلة وقسمة الدخل التي يجب الامتثال لها. أيضا، ذات أهمية خاصة للتجار، إذا كان 60 أو أكثر من الدخل الخاص بك C - فيلق مستمدة من التداول فإنه يمكن اعتبار شركة القابضة الشخصية وتخضع لمعدل الضريبة 35. إذا كان عملك الوحيد هو التداول، C - فيلق لا ينبغي أن تستخدم دون التشاور أولا مع المهنيين المختصين والمحاسبة القانونية لتنفيذ استراتيجيات لتجنب هذه النتيجة. S - الشركات هي نفسها في الهيكل والإدارة والتشغيل في جميع النواحي باستثناء الضرائب. حيث تخضع شركة C-كورب إلى هيكل معدل ضريبي منفصل، يتم فرض ضريبة على شركة فرعي-S على العائد الشخصي الشخصي للمساهمين الأفراد. طبيعة تدفق هذا الكيان يجعلها وسيلة مثالية للتداول. وبما أن الدخل يظل مكاسب رأسمالية في طبيعته فإنه لا يخضع لضريبة العمل الحر. والسبب الثاني لإنشاء شركة S هو حماية الأصول. ولا يجوز لأي شخص يقاضي التاجر الفردي أن يكون قادرا بوجه عام على الحصول على أصول شركة S. من ناحية أخرى، فإن أي شخص يقاضي شركة S لن يكون قادرا على الحصول على أصول التاجر خارج الكيان المؤسسي، ومع ذلك، يتم الحفاظ على الكيان المؤسسي بشكل صحيح. S - فيلق، هل، ومع ذلك، لديها بعض القيود. وتشمل القيود الضريبية الرئيسية عدم استقطاع أقساط العجز، والقيود المفروضة على استقطاع أقساط التأمين الطبي للمساهمين، وزيادة التدقيق في توظيف أفراد الأسرة. بالإضافة إلى ذلك، لا يمكن أن يكون هناك أكثر من 75 المساهمين. كما هو الحال مع جميع الشركات من الضروري أن يتم الحفاظ على فيلكوت كوتكوربورات. إذا كان يمكن إثباتها من قبل مصلحة الضرائب الأمريكية أو الدائنين الآخرين بأن الشركة لا يتم إجراؤها ككيان قانوني مستقل، بل هو مجرد حصص إحصائية للمساهم، سيتم فقدان المزايا الضريبية وخصائص حماية الأصول. في كثير من الأحيان يرغب التجار لإدارة المحافظ الاستثمارية للآخرين. وأسباب هذا المشروع عديدة. من بين الأسباب الأكثر شيوعا: (1) طلب المتداول من قبل الأصدقاء وأفراد العائلة إدارة محافظهم أو (2) يرغب التاجر في زيادة ربحيته من خلال تلقي رسم حافز بناء على أداء حساب تداول أكبر بكثير. في مثل هذه الحالات يصبح من المهم من أي وقت مضى أن يتم تنظيم المشروع بشكل صحيح لحماية كل من التاجر والمستثمر. بدأ أول صندوق تحوط في عام 1949 من قبل ألفريد دبليو جونز، الذي أعطى الصندوق اسمه. وكان صندوق التحوط جونز الرواية في الجمع لأول مرة ثلاثة الأدوات المتاحة سابقا. واستخدمت شراكة خاصة باعتبارها وسيلة قانونية لأقصى قدر من المرونة، باعت الأسهم قصيرة، واستخدام الرافعة المالية. وأوضح جونز أن وجود مراكز طويلة وقصيرة في محفظة قد يزيد من العائدات بينما يقلل في الوقت نفسه من المخاطر بسبب تعرض أقل للسوق. ويمكن للرافعة المالية أن تزيد من تعزيز هذه الآثار. وفي حين أن العديد من صناديق الاستثمار الخاص لم يعد اليوم يستخدم استراتيجيات التحوط أو أن يفعل ذلك بدرجة أقل، لا يزال يستخدم مصطلح "كوثدج فونكوت" اليوم. ولأغراض هذا التفسير، سيستخدم مصطلح "صندوق التحوط" لوصف أي صندوق استثمار خاص ينظم كشراكة ويستفيد من هيكل رسوم قائم على الأداء (سواء استخدمت استراتيجيات التحوط للحماية من مخاطر السوق). بعض المحاولات المعروفة في تحديد ما هي صناديق التحوط هي: صندوق الاستثمار المشترك الذي يستخدم الرافعة المالية ويستخدم تقنيات مختلفة من التحوط. - جورج سوروس كوتا الشراكة المحدودة التي يتم عادة دفع الشريك العام على أساس الأداء. مدير صندوق التحوط لديه قدرا كبيرا من المرونة أكثر من مدير المال التقليدي، وهذا هو حقا عنصر أساسي. - مايكل شتاينهاردت. وتتمثل إحدى الخصائص الرئيسية لصناديق التحوط في قدرتها على استخدام أدوات وتقنيات الاستثمار غير التقليدية. وتنظم صناديق التحوط صناديق رأس المال الاستثماري بشكل خفيف، مع عدم وجود قيود على فئات الأصول أو تقنيات الاستثمار أو استخدام الرافعة المالية. وعلى النقيض من ذلك، فإن الصناديق المشتركة تخضع للتنظيم الشديد، وعادة ما تفشل في أن يكون لها نفس نطاق الأدوات المتاحة لها (ولا سيما النفوذ والقدرة على الاقتراب). توفر صناديق التحوط الأموال ماناغرترادر ​​مع وسيلة أكثر كفاءة لاستراتيجيات الاستثمار القائمة على المهارات. وكان مدير صندوق التحوط النموذجي محنك لسنوات عديدة كمتداول في شركة وول ستريت أو شركة صناديق استثمار متبادلة قبل اتخاذ قرار الدخول في الأعمال لأنفسهم من خلال بدء صندوق التحوط. ويقوم مديرو صناديق التحوط عادة بتحصيل رسوم متعلقة بالأداء تركز على العوائد المطلقة، بالإضافة إلى فرض رسوم ثابتة على التكاليف الإدارية. وبالتالي، فإن المستثمرين في صناديق التحوط يعتمدون على، ومكافأة، مهارة المدير بدلا من تحركات الأسواق الأساسية. على مدى السنوات الخمسين الماضية أصبحت هذه الأموال الخاصة شعبية للغاية، ويرجع ذلك أساسا إلى نجاح وسوء السمعة من مديري الصناديق مثل جورج سوروس ومايكل ستينهاردت، إلى جانب أنها قد تفوقت بشكل كبير على السوق بشكل عام والعديد من أشهر صناديق الاستثمار. وعلى الرغم من عدم التنظيم بشكل عام، هناك العديد من القوانين الفيدرالية والولائية التي يجب النظر فيها في هيكلة صندوق التحوط. يتضمن اإلطار التنظيمي الذي يحكم بشكل عام صناديق التحوط ما يلي: قانون األوراق المالية لعام 1933: ال يتم تسجيل الحصص في صناديق التحوط بموجب قانون األوراق المالية لعام 1933 بصيغته المعدلة، أو أي قوانين أخرى لألوراق المالية، بما في ذلك قوانين األوراق المالية الحكومية أو قوانين السماء الزرقاء - يتم تنظيمها بشكل صحيح للاستفادة من الإعفاءات المطبقة على الأوراق المالية المعمول بها. وبدلا من ذلك، تقدم مصالح صندوق التحوط بالاعتماد على الإعفاء من التسجيل المنصوص عليه في المادة 4 (2) من قانون الأوراق المالية لعام 1933 والمادة (د) الصادرة بموجبه. ويطلب من المشترين المحتملين أن يمثلوا أنهم مستثمرون مؤهلون حسب التعريف الوارد في المادة (د) وأنهم يكتسبون الفائدة لأغراض الاستثمار فقط وليس لأغراض إعادة البيع أو التوزيع. قانون الاستثمار لعام 1940: تخضع أموال التحوط لقانون شركة الاستثمار لعام 1940. ويقتصر عدد أصحاب المصالح النافعة، لأغراض قانون شركة الاستثمار لعام 1940 وتعديلاته، على 100 أو أقل للتأهل للحصول على الإعفاء من أحكام قانون شركة الاستثمار. وفيما يتعلق بتحديد عدد هؤلاء المالكين المستفيدين، يجب على صناديق التحوط أن تحصل وتعتمد على التمثيلات والتعهدات المناسبة من كل شريك محدود من أجل ضمان استيفاء الصندوق لشروط الإعفاء على أساس مستمر. قانون المستشارين الاستثماريين لعام 1940: يختار بعض الشركاء العامين لصناديق التحوط التسجيل كمستشارين استثماريين (أو هم بالفعل مستشارون استثماريون) بموجب قانون المستشارين الاستثماريين لعام 1940. ولا يعتمد آخرون على الإعفاء من شروط التسجيل الواردة في القانون وتنص المادة 203 (ب) (3)، التي تعفي من التسجيل أي مستشار استثماري كان لديه أقل من 15 عميلا خلال الأشهر الإثني عشر السابقة ويستوفي بعض المتطلبات الأخرى. وقد يخضع الشركاء العامون الذين يسجلون أنفسهم لقيود الرسوم المختلفة الواردة في قانون المستشارين الاستثماريين ومتطلبات المستثمرين الأكثر صرامة المعتمدة. قوانين الدولة السماء الزرقاء: بالإضافة إلى القوانين الاتحادية، كل دولة لديها القوانين والأنظمة الخاصة بها (قانون السماء الزرقاء) التي تنظم عرض وبيع الأوراق المالية من وإلى تلك الدول أو إلى المقيمين في تلك الولايات. وفي العديد من الولايات، يجب تقديم الإيداعات للتأهل للإعفاء من التسجيل. في حين أن غالبية الدول قد اعتمدت في شكل من أشكال قانون الأوراق المالية الموحدة لعام 1956، واعتمدت العديد من الولايات في شكل من أشكال قانون الأوراق المالية الموحدة المنقح لعام 1985، والقوانين الخاصة لكل ولاية تختلف، والامتثال لقوانين السماء الزرقاء الدولة يجب يتم تحديدها قبل تقديم أي عرض من، أو من مقيم في تلك الدولة. تاريخيا، تم تشكيل صناديق التحوط للمستثمرين في الولايات المتحدة كشراكات محدودة. غير أن جميع الدول تقريبا، على مدى السنوات القليلة الماضية، أصدرت تشريعات توافق على الشركة ذات المسؤولية المحدودة (ليك) باعتبارها كيانا يوفر حماية المسؤولية للمستثمرين فضلا عن الضرائب المتدفقة. ويمكن تنظيم الأموال باستخدام هذا النموذج أيضا. ويوصى بأن يكون الشريك العام لشراكة محدودة منظم على أنه شركة أو شركة ذات مسؤولية محدودة، وذلك للمساعدة في حماية الشريك العام الذي لديه مسؤولية غير محدودة. ومع ذلك، تجدر الإشارة إلى أنه بسبب القوانين المتعلقة بالغش وقوانين الأوراق المالية الأخرى قد لا تكون هذه الحماية المسؤولية مطلقة. أنا متأكد من أنك قد سمعت القول، تعامل التداول مثل الأعمال التجارية. إنشاء كيان تجاري بشكل صحيح هو خطوة مهمة إذا كنت (أو تخطط لتكون) تاجر بدوام كامل. هذا سوف يسمح لك للاستفادة من العديد من الفوائد التي المستثمر النموذجي لا يملك الوصول إليها. بعد قراءة هذه المقالة سيكون لديك فهم: كيف وظائف تجارية التداول ما هي مكونات الأعمال التجارية هي أي نوع من النفقات يمكنك شطب لها حقا بسيط جدا، هوبيس تكلفة المال، والشركات كسب المال. والغرض من الأعمال التجارية هو الحصول على الأرباح تماما مثل الأعمال العادية. الفرق هو أنك لا تبيع منتجا أو تقديم خدمة، وبالتالي فإن الفوائد الحقيقية لإنشاء كيان حول نشاطك التجاري هي لأغراض ضريبية. تشكيل الكيان التجاري الخاص بك الطريقة الأكثر شيوعا لإعداد كيان تجاري هي شركة ذات مسؤولية محدودة (ليك) في الدولة التي تعيش فيها. في حين تختلف قوانين الضرائب من دولة إلى أخرى، فإنها لا توفر ميزة كبيرة عند إنشاء كيان التداول الخاص بك. الاسم لا يحتاج إلى أن يكون باهظا، حيث أن الغرض من شركة ذات مسؤولية محدودة هو فصل رأس المال التجاري الخاص بك من الاستثمارات الشخصية الخاصة بك، مما يحد من المسؤولية كما يذكر الاسم. وبغض النظر عن الحالة التي تقوم بها الكيان الخاص بك، سوف تحتاج إلى صياغة مواد المنظمة الخاصة بك. وثيقة تتضمن ما يلي: اسم الكيان الغرض مكان العمل المعروف العنوان الأعضاء ونسبة التوقيعات الأعضاء في الملكية في معظم الحالات سوف تكون العضو الوحيد المسؤول عن كيان التداول الخاص بك. أوصي بمراجعة المعلومات في IRS. gov على إنشاء شركة ذات مسؤولية محدودة. كما أنها فعالة لتقديم ليك الخاصة بك تخضع للضريبة باعتبارها S - كورب. هذا هو تماما لأغراض الضرائب لأنه يجعل عملية إيتميزاتيون أسهل. بمجرد إنشاء الكيان الخاص بك يمكنك ثم ملف للحصول على رقم تعريف الموظف (إين). سيتم استخدام هذا الرقم في جميع النماذج الضريبية وحسابات التداول حيث أن هذه هي الطريقة التي ستقوم بها مصلحة الضرائب بتحديد الكيان التجاري الخاص بك منفصلا عن رقم الضمان الاجتماعي الشخصي الخاص بك. سيكون بمقدور أخصائي الضرائب المرخص لك السير في هذه العملية والإجابة عن أي أسئلة لديك على طول الطريق. وأود أن تحقق لمعرفة ما إذا كان لديهم خبرة مع المحاسبة الضريبية التجارية كما أن هناك الكثير من المنطقة الرمادية في القوانين الحالية. هل أنت مؤهل للتداول وضع الضرائب هذا هو السؤال الأول الذي تحتاج إلى طرحه. وسوف أشير روبرت الخضر كتاب، دليل الضرائب للتجار كما أصبح هذا معيار الصناعة للمحاسبة الضرائب التاجر. لا يوجد اختبار موضوعي لتحديد مؤهل الحالة الضريبية للتاجر. وضعت مصلحة الضرائب المعايير التالية لتحديد ما إذا كنت مؤهلا للحصول على حالة الضرائب التاجر. 1. يجب أن يكون تداول دافعي الضرائب كبيرا ومنتظما ومتكررا ومستمرا. التداول المتقطع لن يكون التجارة أو الأعمال التجارية. 2 - يسعى دافعي الضرائب للقبض على التقلبات في تحركات السوق اليومية والربح من هذه التغيرات القصيرة الأجل بدلا من الاستفادة من الاستثمارات الطويلة الأجل. كما ترون المعايير غامضة تماما، ولكن إذا كنت التداول اليوم أسواق العقود الآجلة على سبيل المثال، ومتاجر بدوام كامل وليس لديهم مصادر رئيسية أخرى للدخل لدفع المعيشة الخاصة بك كنت مؤهلا دون سؤال. إذا كنت متداولا بدوام جزئي لأن لديك نشاطا تجاريا آخر، فقد تقوم مصلحة الضرائب الأمريكية بمراجعة مؤهلاتك لحالة ضريبة التاجر. ما هو مارك إلى المحاسبة في السوق مارك-تو-ماركيت (متم) يشير إلى الإجراء الذي تتبعه في نهاية العام عند وضع علامة على جميع المراكز المفتوحة لأسعار السوق. لا تسري ھجرة العبور عبر المتوسط ​​إلا علی الأرباح والخسائر التجاریة التي لا تنطبق علی مصاریف التجار التجاریة. يجب عليك انتخاب متم المحاسبة أنه لا الافتراضي عند وضع حالة الضرائب تاجر. السلع والعقود الآجلة تستخدم طريقة ضريبية مختلفة من الأوراق المالية، والقاعدة 6040. وهذا يعني أنه يتم فرض ضرائب على 60 من الأرباح على المدى الطويل، و 40 في المدى القصير. المحاسبة في سوق مسقط للأوراق المالية ليست طريقة مفضلة للسلع المربحة وتجار الأعمال الآجلة لأن هذا المخلوط 6040 معدل هو أقل بكثير من أن كامل الأرباح الخاصة بك ضرائب على المدى القصير. ماذا لو كان لديك سنة خاسرة يسمح دافعي الضرائب الأعمال الاستفادة من صافي قوانين ضريبة الخسارة التشغيلية. وتتيح هذه القوانين الفرصة لحمل الخسائر التجارية إلى الأمام والخلف. جعل ثروة في أذن واحدة ودفع الضرائب الخاصة بك ثم تفقد ثروة في السنوات التالية وتحمل صافي خسائر التشغيل للحصول على استرداد مبالغ كبيرة. ما هي المصروفات التي يمكن أن تزاول نشاطا تجاريا مكتملا المزايا الأخرى لإنشاء كيان تجاري هي القدرة على وضع خطط التقاعد وخصم أقساط التأمين الطبي والصحي وشطب المصروفات الإضافية مثل معدات الحاسوب والسفر إلى المعارض التجارية والمواد التعليمية. بما أن مكاسب وخسائر التداول الخاصة بك تعتبر أرباحا وخسائر عادية عند اختيار محاسبة سوق العبور عبر المتوسط، يمكنك خصم كامل مقابل أي نوع من إيرادات الإقرار الضريبي. القدرة على خصم نفقات المكاتب المنزلية والتعليم والاستهلاك على أجهزة الكمبيوتر والمعدات المكتبية هي فائدة لم تخصص للمستثمر نموذجي. يجوز للمتداول التجاري استخدام الجدول جيم لهذه النفقات التجارية. سواء قررت إنشاء كيان تجاري وملف لحالة الضرائب التاجر أو الاستمرار كتجارة غير تجارية، يجب عليك وضع خطة مفصلة للمستقبل إذا كنت تريد أن تنجح. استشر أخصائي الضرائب الخاص بك تأكد من التشاور مع المهنية الضرائب المرخصة التي هي ضليعا في قانون الضرائب التاجر. الموارد من هذه المقالة: للحصول على معلومات أكثر تفصيلا عن العقود الآجلة للتجارة زيارة صفحة البدء. زر link8221eminimindhow-تو-سيتوب-ترادينغ-بوسينيس-pdf8221 style8221download8221 window8221yes8221 تحميل المادة ك بدفوتونفار أقل احتمالا أن يتم اختيارها لمراجعة حسابات مصلحة الضرائب (إذا تم إعدادها بشكل صحيح من قبل أخصائي الضرائب). If selected for an audit, the typical IRS arguments against a taxpayer for having other interests and other sources of income are moot (if a proper separation of personal and corporate operations is maintained). Taxpayers who only have time to trade part-time use entities to get around this IRS bias. Retirement plans can sock away money now to grow without paying taxes each year on the income. The high-exposure Office in the Home deduction is replaced with a 119 rental allocation for renters or a 162 deduction for utilities, repairs and insurance expense allocations for homeowners. Meal expenses under 119 can be fully deductible. Child care or other employee perks are deductible under 125. Medical insurance can be partially deductible for some entities with employees or fully deductible for C-corps with employees. Medical expenses over and above what insurance pays for may be deductible for C-corp employees. Generally, expenses are quotmore justifiedquot when deducted by an entity in particular: automobile, travel and entertainment expenses. Generally, equipment depreciation and the related 179 deduction are more likely to be accepted quotas isquot when taken by an entity. Theres a limited amount of asset protection via quotthe corporate shield. quot More sophisticated structures using multiple entities can offer even stronger asset protection. If you can establish a presence of quotnexus quot in a low-tax or no-tax State, you can reduce your home State income taxes . As an employee of your own entity, you can skip paying quarterly estimated taxes, declare yourself a bonus in December and have the withhold taxes from that bonus retroactively apply to the three prior quarterly due dates. An entity may elect Mark-to-Market as soon as it is formed, whereas an individual must only elect in advance, between January 1st and April 15th. An entity may be terminated when it no longer serves its original purpose. Terminating an individual trader, on the other hand, is quite painful They cost money Often running several hundred to over a thousand dollars to establish and maintain annually. If tax returns are not professionally prepared the chances of audit are often actually increased, under the theory that an entity tax return is too complicated for an individual to accurately prepare himself. Office in the Home deduction is more complicated or prohibited outright, because the individual himself no longer runs the business, rather the entity does (but see the 119 deduction above). quotRequiresquot maintaining a separate set of books and records. Separate bank account and separate brokerage account are highly desirable. The paying of a salary is necessary for several of the employee related benefits, and therefore the amount of the salary is subjected to FICA tax. Medicare tax and Unemployment taxes. Care must be taken to comply with the employer tax laws for timely paying and filing quarterly payroll tax returns, Which is quotbestquot To decide which form of business organization is appropriate involves the consideration of such factors as the ease of creation, the liability of the owners, tax considerations, and the need for capital. Each form has advantages and disadvantages that indicate when it is most useful. The entities with highest likelihood of IRS audit are the sole proprietorship trader and the sole proprietorship trader that has elected mark-to-market . The IRS and Tax Court challenges here are often based on the amount of other, extracurricular activities that the individual may have going on in addition to his trading activities such as: employment at a quotday job, quot other investment portfolio activity, taking time off, other odd money making ventures, hobbies and social activities, etc. By placing your trading activities in a separate entity. such as a C-Corp. an S-Corp. a multi-member LLC or a Family Partnership that is dedicated solely to securities trading, you can effectively eliminate most of the extracurricular activity challenges the IRS might bring up. The quotoddsquot of being selected for IRS audit in the first place is lower for these other entities as well. The quotdownsidequot is higher compliance costs (State fees, CPA fees, Legal fees, Bank fees, etc.) and the time and effort with the formalities to properly maintain the entity. Due to inadvertent missteps, taxpayers can lose some of the tax benefits when these formalities are not handled timely, consistently and properly. This can happen when the owners just dont have the TIME, or DESIRE to handle the paperwork because they are spending twelve hours a day following the markets and trading Potential solution for traders who what to trade and not get bogged down with the bookkeeping and corporate functions: There are financial affairs managers that high-wealth individuals such as actors, ball players and other entertainment people hire to keep their corporations in proper order while they tend to their chosen trade or profession. And you can certainly hire such a management company. This same concept is something TraderStatus is looking to provide if the demand is out there. My current thinking is a Connecticut LLC formed with a TraderStatus designee and yourself as members, where all the day-to-day business (bill paying, payroll, pension compliance, government mailing, etc.) is taken care of right here, leaving you to trade without getting into the details of compliance yourself. This seems to have the potential of a win-win situation for traders who want the benefits of a multi-member LLC but dont have the time, knowledge or desire to bother with all the proper paperwork and overhead. Connecticut may also have preferential asset protection against charging orders under RULPA. If this is of interest, lets talk. Most full-time traders operate as sole proprietors : The most common of these entities, and the easiest one to operate your Trade or Business of Securities Trading in is the Sole-Proprietorship . The sole proprietor taxpayer likely already has several brokerage accounts, pays low non-professional real time quote fees, and files federal form 1040 for his taxes. All brokerage firms understand how to open accounts for sole proprietors (aka individuals). These are generally the easiest accounts to open and to fund and the fees charged are generally not any higher than for the other available forms of legal entity. With a sole-proprietorship your creditors (e. g. margin account loans) can make claims against both your trading business accounts and your personal assets. A sole-proprietorship is the only form of securities trading entity strictly prohibited from establishing a retirement plan (IRA, Keogh, Profit Sharing Plan, Money Purchase Plan, Defined Benefit Plan, Defined Contribution Plan, and so on) for yourself, although you can establish one for your employees, which could include your siblings, spouse, children or other relatives. A Securities Trader operating as a Sole Proprietor quotmerelyquot needs to add in a couple forms to his regular IRS form 1040: a schedule C and any number of these forms: Schedule D, form 4562, form 4797 and form 8829. Due to the complexity of trader status tax work it is oftentimes advisable that a professional (such as us ) be retained to plan and prepare all your compliance tax work. But many sole proprietors do their own taxes. Part-time traders and other special situations: IRS Publication 535 Business Expenses Deducting Business Expenses If you do not carry on your business or investment activity to make a profit, you cannot use a loss from the activity to offset other income. Activities you do as a hobby, or mainly for sport or recreation, are often not entered into for profit. The limit on not-for-profit losses applies to individuals, partnerships, estates, trusts, and S corporations. It does not apply to corporations other than S corporations. In determining whether you are carrying on an activity for profit, several factors are taken into account. No one factor alone is decisive. Among the factors to consider are whether: You carry on the activity in a businesslike manner. (aa) The time and effort you put into the activity indicate you intend to make it profitable, (bb) You depend on the income for your livelihood . (cc) Your losses are due to circumstances beyond your control (or are normal in the start-up phase of your type of business), (dd) You change your methods of operation in an attempt to improve profitability, (ee) You (or your advisors) have the knowledge needed to carry on the activity as a successful business, (ff) You were successful in making a profit in similar activities in the past, (gg) The activity makes a profit in some years, (hh) and You can expect to make a future profit from the appreciation of the assets used in the activity. (ii) IRS Regulations - Activity not engaged in for profit defined 1.183-2(b)(1)-(9) In determining whether an activity is engaged in for profit, all facts and circumstances with respect to the activity are to be taken into account. No one factor is determinative in making this determination. In addition, it is not intended that only the factors described in this paragraph are to be taken into account in making the determination, or that a determination is to be made on the basis that the number of factors (whether or not listed in this paragraph) indicating a lack of profit objective exceeds the number of factors indicating a profit objective, or vice versa. Among the factors which should normally be taken into account are the following: Manner i n which the taxpayer carries on the activity. (aa) The expertise of the taxpayer or his advisors. (ff) The time and effort expended by the taxpayer in carrying on the activity. (bb) Expectation that assets used in activity may appreciate in value. (ii) The success of the taxpayer in carrying on other similar or dissimilar activities. (gg) The taxpayers history of income or losses with respect to the activity. (dd) The amount of occasional profits, if any, which are earned. (hh) The financial status of the taxpayer. ( does not have substantial income or capital from other sources ) (cc) Elements of personal pleasure or recreation. (jj) Practical thoughts - additional things to do to support your position that you or your entity truly are in a for-profit trade or business: Open a checking account for the business, separate from a personal use account Obtain a credit card for the business, separate from a personal use card Take a training class, attend a seminar, buy books on how to make the business profitable Set up a budget for the business andor a projection showing goals and profit ability in future years Document you plans, at least annually showing goals for the year to make the business profitable The Internal Revenue Service Frequently Asked Questions about trader status includes the following statement: quotBasically, IF your day trading activity goal is to profit from short-term swings in the market rather than from long-term capital appreciation of investments, AND is expected to be your primary income for meeting your personal living expenses. i. e. you do not have another regular job, your trading activity might be a business. quot Does this say you must be a quotfull-timequot trader No, it does not. It says that if you are a full-time trader that you might qualify to file under TraderStatus. Thats not to say that a part-time trader might not also qualify to file under TraderStatus. But this begs the obvious question: Do you want to be the lucky one arguing this fine point with an IRS auditor while shes shaking her head as she peers down looking at all your deductions Part-time traders or anyone seeking a more sophisticated approach to their trading, estate planning, asset protection and their taxes should seek to establish an insulating entity from which to operate their trading activity. An LLC or S-Corp for example, properly established, can be set up to trade securities full-time as its one and only business even if the individual himself has other conflicting activities (such as a full-time day job). A newly established legal entity may elect the Mark-to-Market method of accounting unencumbered by the restrictive quotApril 15 th deadline. quot For individuals who have missed the April 15 th filing date, forming a legal entity is an alternative to waiting until the following years April 15 th filing date. Most common is the use of pass-thru entities which themselves pay little or no tax, but rather pass-thru the net business activity which is then taxed to the owners in proportion to their investment interest in the entity. Note that while quotinvestmentsquot in stocks and securities is a quotdirty wordquot when it comes to the business of Securities Trading, it is just fine for an individual to have a direct active investment in a trading entity. More sophisticated tax planning may utilize entities that are taxed directly (the C-Corp, for example). Several of the Trader Status business expenses are reserved for creative (but fully legal) use of the C-Corp. The C-Corp may be your primary trading vehicle, or perhaps it might be a memberpart-owner of your LLC or Family Limited Partnership which allows you to split some of your annual profits off to the C-Corp to be sheltered by those special deductions, while the remainder is taxed at personal tax rates of the trader and other family members (including the children, in the lower tax brackets). A Securities Trader operating as an LLC andor corporation needs to file a number of tax forms besides his regular IRS form 1040. For example IRS forms 1065, 1120, 1120S etc. and any number of these forms: Schedule C, Schedule D, Schedule E, form 2106, form 4562, form 4797 and form 8829. Due to the complexity of preparing and coordinating all of these tax forms, it is imperative that a professional (such as us ) be retained to plan and prepare all your compliance tax work. IRS FAQ (circa 2005) I buy and sell stocks as a day trader using an online brokerage firm. Can I treat this as a business and report my gains and losses on Schedule C A business is generally an activity carried on for a livelihood or in good faith to make a profit. Rather than being defined in the tax code, exactly what activities are considered business activities has long been the subject of court cases. The facts and circumstances of each case determine whether or not an activity is a trade or business. Basically, if your day trading activity goal is to profit from short-term swings in the market rather than from long-term capital appreciation of investments, and is expected to be your primary income for meeting your personal living expenses, i. e. you do not have another regular job, your trading activity might be a business. If your trading activity is a business, your trading expenses would be reported on Form 1040, Schedule C, Profit or Loss from Business (Sole Proprietorship) instead of Form 1040, Schedule A, Itemized Deductions. Your gains or losses, however, would be reported on Form 1040, Schedule D, Capital Gains and Losses, unless you file an election to change your method of accounting. If your trading activity is a business and you elect to change to the mark-to-market of accounting, you would report both your gains and losses on Part II of Form 4797, Sales of Business Property. Corporation : (also see C-Corp and S-Corp below) This is the most formal of all business organizations: a state-chartered legal entity. It is owned by shareholders, whose losses are limited to the amount of their investment. A corporation may own real property and can sue or be sued in the corporate name. Shareholders are not personally liable for the corporations debts the corporations assets are protected from individual shareholders debts. There are three types of corporations, quotCquot, quotSquot and non-profit. The difference is in the way they are taxed: A quotCquot corporation pays federal and state income taxes on earnings when shareholders receive dividends, they are taxed again. An quotSquot corporation generally does not have to pay federal income tax its shareholders pay taxes on their share of the income on their personal tax returns. The quotSquot corporation therefore escapes the double taxation of a quotCquot corporation. Tax filing status varies according to type of non-profit. There are many filing types and the type must be determined when filling out corporation papers. Note: Foreign corporations (including companies headquartered in another state or country and doing business in your home state) have a separate tax obligation. Under IRS Code 7701 there are several quotlevelsquot of formality that I have seen misused by well-meaning quottax advisorsquot in recent years: the quotstatutoryquot corporation . where the State has recognized the entity as a corporation. Usually, corporations are created under corporate statutes of a particular State and this ends the matter for the Service. The Service will rarely interfere with the States determination that an entity is a corporation and that the entity is taxable as a separate entity. For example, a parent corporation and its corporate subsidiary are recognized as separate taxable entities so long as the purposes for which the subsidiary is incorporated are the equivalent of business activities or the subsidiary subsequently carries on business activities. Moline Properties, Inc. v. Commissioner, 319 U. S. 436, 438 (1943) Britt v. United States, 431 F.2d 227, 234 (5th Cir. 1970). That is, where a corporation is organized with the bona fide intention that it will have some real and substantial business function, its existence may not generally be disregarded for tax purposes. Britt, supra. To disregard the corporate entity requires a finding that the corporation or transaction involved a sham or fraud without any valid business purpose, or a finding of a true agency or trust relationship between the entities. G. C.M. 39326 (January 17, 1985) G. C.M. 35719 (March 11, 1974). the de jure corporation . A corporation may be found to exist, even though the States Secretary of State has not recognized such corporation. One such non-statutory corporation is a de jure corporation that exists where there has been full compliance, by the incorporators, with the requirements of an existing law permitting the organization of such corporation, but the entity is not a quotstatutoryquot corporation because the state has failed to recognize the entity as a corporation. A de facto corporation is a corporation existing under color of law and in pursuance of an effort made in good faith to organize a corporation under the statute. For example if the incorporators quotcrossed all the Ts and dotted all the Is, quot but the filing clerk lost the file, then that organization might qualify as a de jure corporation. the de facto corporation . A corporation may be found to exist, even though the states secretary of state has not recognized such corporation. One other such non-statutory corporation is the de facto corporation. For example, if the incorporators failed to sign one of the filing documents, then that organization would probably not qualify as a de jure corporation, but it might qualify as a de facto corporation. Not all states recognize either de jure corporations or de facto corporations. FYI: In law the term quotde facto partnershipquot has been used to refer to arrangements that should be regulated as if they are partnerships, because their substance is similar to that of partnerships although their form is not. The concept of quotde facto partnershipquot is used in some theoretical writings, and is also found in Alabama State Bar Op. 89-15 (Mar. 2, 1989), which advises that certain space sharing circumstances may create de facto partnerships the opinion is noted in Arthur Garwin, Suite Harmony: Protecting Client Confidentiality While You Share Space, 78 A. B.A. J. 88 (Mar. 1992). There is no judicial authority for enforcing the antipartnership rules against a de facto partnership. Whereas, a de facto partnership has no real meaning as a separate entity in tax law other than referring to domestic partners or a common law marriage between two people. expl: quotTheyve invited Joyce and her de facto to the party. quot a corporation by estoppel . In a case involving contract creditors contracting with a corporation that hadnt gotten its certificate filed, if theres no fraud by anybody, the contract is made in the corporate name, there was no individual guarantee from the shareholder then you have a corporation by estoppel, if not a de facto corporation. It takes a bit more to be a de facto corporation rather than by estoppel. If youre de facto, it operates against tort and contract creditors, but if youre by estoppel, it only applies to contract creditors who made a deal with you in the corporate name. the quotcorporation sole:quot A type of unusual corporation that an Exempt Organizations specialist may encounter from time to time is the quotcorporation sole. quot A corporation sole is a type of corporation that is controlled by only one person in a designated position whose successor automatically takes over on that persons death or resignation. The purpose of the corporation sole is to give some legal capacities and advantages, particularly that of perpetuity, to people in certain positions which natural persons could not have. The corporation is limited in the main today to bishops and heads of dioceses. Benefits: Ability to pay yourself or family members, as employees, earned income in the form of a salary from the corporation. This salary is subject to FICA (6.2 plus a matching 6.2) and Medicare tax (1.45 plus a matching 1.45) for a total tax of 15.3 of approximately 100,000 of your annual earned income (2.9 thereafter) which is credited to your ability to collect Retirement Social Security, Spouses Retirement Benefits, Disability, Family Benefits, Survivors Benefits, Medicare, Medicaid, amp Supplemental Security Income. These extra taxes may run up to approximately 15,000 per employee earning greater than 100,000.The salaries are tax deductible from corporate income in the year paid by the corporation (which generally must be the same year it is picked up as income by the family employee). One half of the above tax (6.2 plus 1.45) is tax deductible from corporate income when paid by the corporation. In lieu of salary, earned income may be paid as quotconsulting fees. quot These are taxed to the consultant (not to the corporation) for SECA purposes (similar to FICA and Medicare). Once quotearned incomequot is generated as per the above, you may receive (if desired and if structured properly) a tax deduction for payments made for health insurance and medical expenses, childrens day care, quotcafeteria plansquot and retirement plan contributions for yourself and family members. Detriments: Salaries paid to employees are subject to FICA and Medicare withholding taxes and the corporation must match these dollar for dollar as a additional corporate expense. The corporation may also be liable for Federal Unemployment tax, State Unemployment tax and Workmans Compensation insurance payments, and the added compliance expense associated with these overhead items. The UC taxes and the WC may cost several hundred dollars or more. The compliance costs may run from virtually zero to several hundred dollars or more. While it is often a good policy to follow is to quotzero-outquot the profits just before the corporations fiscal year-end. This entails a concerted effort in the 11 th month to compute the projected taxable income and to physically pay a salary-bonus to the owners. Keeping it legal . The most important thing to know about operating your corporation is that you need to leave a documented paper trail of all of your important business activities. Its extremely important to keep the business and affairs of the corporation separate from the personal affairs of any stockholder, director or officer. This means setting up a separate bank account in the name of the company, maintaining separate records, and keeping separate books for accounting purposes. Directors need to hold periodic meetings, and shareholder must meet once per year to elect directors. Meetings can take place in person at your home, at a restaurant over a fancy dinner meal or by telephone. Be sure to make a written record of the items discussed and actions approved at the meetings in your corporate minute book (part of your quotcorporate kitquot usually obtained when the corporation is formed). Alternatively, you can sometimes get away with just having all the directors (or a majority of the stockholders) sign a statement approving corporate actions. A commonly cited ground for piercing corporate liability shields involves failure to respect corporate formalities. Inadequate capitalization is frequently mentioned as a ground for piercing a corporate liability shield. Buy-Sell Agreements are needed to govern the assignment and transfer of ownership interests. Generally, a stockholder is free to sell or transfer shares to anyone. However, with small corporations where the stockholders act more like partners and each is integral to the success of the company, you may wish to consider placing restrictions on the transfer of shares. Stockholders sometimes enter into such buy-sell agreements which give the terms for when and how shares can be transferred or sold. A typical buy-sell agreement would state that if one stockholder seeks to sell shares to any third party, the other stockholders have a right of first refusal that is, the other stockholders may purchase those shares at the same price. Only if the other stockholders do not purchase those shares can a stockholder sell to a third party. Each corporation must obtain a federal tax identification number using form SS-4, which use is similar to that of an individuals social security number. In addition, state, county and city business licenses may also be required. Please check with your city and county to see which type of licenses are needed. Out-of-State entities. Summary: Incorporating in Nevada or Delaware may not be the best for a small business. 1. You may ultimately pay more fees, since your home state wants their share and youll have to pay a Registered Agent. 2. Its not that much quicker to form than in most other states. 3. Yes, their courts are pro-business, but that doesnt mean that they are anti-consumer. 4. Yes, you can be anonymous, but how important is that for a trader 5. True, there are no DE or NV state taxes, but there will be in your home state. Forming your C-Corporation outside of your regular state of residence is a sophisticated method of reducing or eliminating State income taxes. Unfortunately there are far too many quotbucket-shopsquot out there touting this as legitimate tax planning to individuals who pay anywhere from 2,500 to 9,000 for a quotpersonalized analysisquot that always ends up with them owning a one-shareholder Nevada C-Corporation (These type of bucket shops also work out of Delaware) There are good reasons to incorporate in Delaware or Nevada, but it shouldnt cost any more than 1,000 to incorporate anywhere plus maybe a quotregistered agent feequot which here at TraderStatus we try to avoid, rather than push on you as an additional revenue generator. Form your corporation with our assistance. But do out-of-State corporations make sense for the one entity C-Corporation used for trading securities The answer for most traders is a resounding quotNO. quot The big reason is that you will have to qualify to do business in your home office and that process takes as much time and money as your out-of-State filing, thereby doubling your costs right off the bat Then you probably need to pay 200 to 500 a year for the out-of-State resident corporate agent, file papers and fees annually in two States, and all for what If your trading business operation takes place in your home office, for example, you still must pay home-state income taxes on this income. Unless you are large enough to actually open an office in Nevada or Delaware and perform substantial operations there rather than performing those activities in your home-state then Nevada and Delaware tax havens are a waste of your time and money. Once you are making good money on a consistent basis, then it is possible that an out-of-State entity will be legally beneficial to you. Typically this is done in conjunction with one or more additional entities formed in your home-state. Also see: Avoid California Double Taxation with an Out-of-State Entity There can be some limited level of asset protection against charging orders un der RULPA based on which state you form the entity in. Use of a statutory close corporation ma y offer similar benefits. You are well advised to see a local attorney if asset protection is what you are seeking. Dont be mislead. Sure, most anyone can form a corporation in a tax-haven State such as Nevada. And if you leave all the money there while severing all connections with your own State of residence it wont necessarily be taxed by your home-state (though it would then have the potential of being assessed punitive federal tax rates). But if you want to USE the money yourself, you need to take it out of the corporation A salary, consulting fee, management fee, or administration fee paid to yourself would be taxed by your residence State. A loan from the corporation to yourself can be attacked as a sham transaction. A loan in excess of 10,000 must carry a fair market interest rate and that interest expense might not be deductible to you, while it is taxable to the corporation A loan with the full rate of interest generally cannot exceed much more than 250,000 because of the punitive quotaccumulated earning taxquot which in effect forces the corporation to pay taxable dividends to the shareholders, making it taxable by the resident State, and double taxed by the IRS There are several common punitive tax implications that owners of trader status C-corps need to be wary of . double taxation on gains (first on the corporate side and again when paid out as dividends to the shareholders). the accumulated earnings (AET) tax of 39.1 on top of the regular corporate tax rates that range from 15 to 39. the personal holding company (PHC) tax of 39.1 on the corporations quotundistributed personal holding company income. quot the personal service corporation (PSC) tax of 35. disallowance of losses under the quotclosely held C corporation at-risk rules. quot disallowance of losses under the quotclosely held C corporation and personal service corporation passive activity loss rules. quot the IRS can reallocate the income and deductions of a personal service corporation (with disastrous effects) back to its shareholders if it was formed or availed of for the principal purpose of tax avoidance. Defined as - if any one shareholder saved more than 2,500 in taxes as a result of forming the corporation rather than operate as a sole proprietorship. the IRS may disregard the corporate entity and allocate the income to the shareholders under the quotassignment of income doctrine quot by showing that the incorporation amounts to an anticipatory assignment of all of the controlling shareholder-employees income to the corporation - if the service-performer employee is controlling the income received by the corporation. the IRS may reallocate income from a corporation to its shareholder-employees by completely disregard the corporate entity as a sham if the corporation does not have enough trading activity and the proper documentation, books and records to show that it carries on a legitimate trading business as a corporation. the IRS specifically reserves the right to reallocate income under provisions in effect before the reallocation rules were enacted. In fact, the proposed regulations provide that these other rules can apply even to corporations that pass the 2,500 safe harbor test described above. for more on this, see this web site link . quotCreativequot ideas such as having the corporation buy you a luxury automobile to cruse in, or a house to live in while you quotsafeguardquot the corporate computers and software are faulty too due to the concept of quotnexus. quot What this means is the corporation holds assets that are located in a State other than Nevada, and as a result quotnexusquot (see the national nexus web site ) is formed giving your residence State taxable income and the ability to find you, audit you and blow apart the little out-of-state tax-haven scheme. Also see this 110 page PDF file by Ernst amp Young about State Income Tax developments. Another ploy being touted is to have two differentseparate securities trader businesses (not a bad idea in itself). One business operation is your own personal Schedule C sole proprietorship or an LLC and the other business operation is run out of a C-Corp. After paying a small fortune for consulting advice you are then told to simply make all your gains within the corporation and taxed there -- and have all your losses reported on your Schedule C where they can shelter other income, such as your spouses W-2 wages. Another similar strategy is to convert the C-Corp into an S-Corp and to have all the losses in this M2M S-Corp while you have the gains in your non-M2M Schedule C, so that you can tax-shelter those gains by using up prior year capital loss carryforwards. I cant help but to wonder who is smart enough, ahead of time, to be able to make all the winning trades in one brokerage account and to have all the tax-benefit loss trades in the other brokerage account. If theres any genius out there who can accomplish that feat, why not just open the account to use for the winners to begin with and then not open any account for the losers Why buy losers to begin with, if you know about it before hand Why not just save all the trading money youd have lost with this crazed scheme being promoted at the high-priced expert tax trader seminars While Out-of-State entities are not necessarily all theyre cracked up to be, there are situations (such as in California) where the State has the gall to impose double taxation on their residents. For example, in CA an LLC is subject to a quotfeequot of approximately 0.1 on gains, with an 800 annual minimum. CA S-Corps pay 1.5 on gains, with an 800 annual minimum. For these instances an Out-of-State entity can make sense. See the link Avoid California Double Taxation with an Out-of-State Entity below, for what we can offer you to completely eliminate these CA fees and taxes. Corporation taxed as a C-Corp. Additional Benefits: A limited amount of Federal income tax savings by shifting up to a maximum of approximately 250,000 of taxable income to the lower corporate tax rates. A limited amount of State income tax savings by shifting up to a maximum of approximately 250,000 of taxable income to a State that does not tax corporate profits. A fiscal year-end other than December 31, 200X may be chosen. This can allow maximum year-to-year flexibility in deferring recognition of income. Additional Detriments: Because the tax attributes are not passed through, it is imperative that each year an accounting be taken before fiscal year-end to make sure the taxable income remaining within the corporation is the desired amount. Fiscal year-end bonuses need to be paid out prior to ending your taxable year. الحذر . When considering year-end bonuses, the old quotbonus out all the cash at year-endquot trick can sometimes backfire due to any number of reasons including: a failed Sec 179 election, personal withdrawals or switches of operating funds, the purchase of a deductible automobile for the trading business and so on. Corporation taxed as an S-Corp. Additional Benefits: By availing yourself to the little know rule known as IRS Regulation 1.1366-1(b) you might be able to convert capital losses in old long-term dog stocks youve been holding into usable fully-deductible ordinary losses. Additional Detriments: The corporation must file a timely Federal election on form 2553 generally by the 15 th day of the 3 rd month of the year of the election. If this is not the 1 st year of the corporation, there are additional C-corpS-corp complications that need to be addressed. Rev. Proc 98-55 offers some relief against the stringent time frame of this election period. Most State recognize the Federal S-corp election, but other States require that their own additional election to be filed. There are many other tricks and traps with the complicated structure of the S-Corp. Some States do not treat a federally recognized S-Corp in the same fashion as does the IRS. An ongoing relationship with a CPA is really required to keep things on track, more so that with many of the other entities discussed on this web page. B Corporation. Additional Benefits: A certification given by B Lab to businesses that pass a socially responsible certification process. B Corporation is not a legal form and has no legal on income tax significance. A B Corp can be structured legally as a C corporation, an LLC, or a sole proprietorship. A company can be certified as a B Corporation without ever incorporating as a benefit corporation. Benefits Corporation. Additional Benefits: A benefit corporation is a legal form that became law in Maryland on October 10, 2010. Legislation similar to that in Maryland will become law in Vermont in July 2011 and was recently passed by the New Jersey legislature. An entity may be a benefit corporation under Maryland law without being a B Corporation. The Maryland law does not require that benefit corporations be certified as a B Corporation. Rather, it requires that benefit corporations social and environmental performance be assessed by an independent third party that makes publicly available or accessible the following information: The factors considered when measuring the performance of a business. The relative weightings of those factors. The identity of the persons who developed and control changes to the standard and the process by which those changes were made. The key difference is that the law requires a third party assessment, whereas a B Corporation is a certification. General Partnership : Two or more parties share business profits and assets by mutual agreement. Each partners actions are legally binding. For federal income tax purposes, a partnership includes a syndicate, group, pool, joint venture or other unincorporated organization by means of which any business, financial operation, or venture is carried on and which is not a corporation, trust, or estate. Tax Court has determined that a partnership exists when the economic benefits enjoyed by the co-owners results not from mere co-ownership of the assets, but from the pursuit together of a common goal. (Bergford 1993, Bussing 1988, Alhouse 1991) Unfortunately some other web sites purporting a specialization in taxes for daytraders suggest that traders form so-called friends and family partnerships or hedge funds without first having a thorough understanding of all the appropriate tax rules. A further discussion regarding the legitimacy (for income tax purposes) of a partnership where each partners share of gains and losses is based on his own individual performance, rather than the groups aggregate performance is found here. Here at TraderStatus we advise traders on how maximize their tax savings while complying with the law the way it is written and applied, but not based on quotmaking up our own lawquot because it helps sell you more services. Benefits: Can be easy to form. In some locations a simple hand-shake creates the partnership. Partners may not get paid a quotsalaryquot or quotwages. quot In lieu of salary, earned income may be paid as quotconsulting feesquot or quotguaranteed payments to partners. quot These are taxed to the partner (not to the partnership) for SECA purposes (similar to FICA and Medicare). Once quotearned incomequot is generated as per the above, you may receive (if desired and if structured properly) a tax deduction for payments made for health insurance and retirement plan contributions for yourself and family members. Detriments: Can be difficult to form properly. A partnership is like a marriage, and therefore a quotprenuptial agreementquot generally known as a quotbuy-sell agreementquot should be drafted by your own local attorney if there is any chance the partners may disagree, become disabled or die, leaving the survivor to contend with named or unnamed beneficiaries. Every partner is jointly and severally liable for the acts of the other partners. فمثلا . if one partner provides capital only (as a silent partner) and the other partner does the actual trading and due to a bad turn in the market a margin call results in a complete wipe out of the account - the brokerage could go after the silent partner account to restore the deficiency. The ease of formation of a general partnership is actually a disadvantage, because co-participants may find themselves with joint and several liability and mutual agency powers even though their arrangement with respect to the business has not been clearly documented. Family General Partnership : A General Partnership whos partners are comprised of family members. The purpose of which is usually to attempt to legally shift taxable income away from higher tax brackets, into lower brackets. This is much less expensive to form and to operate than a Family Limited Partnership. Other benefits and detriments are basically the same as for the General Partnership. Limited Partnership (LP) : Originally designed to attract INVESTORS who invest capital but, by definition, do not take part in day-to-day operations. As a result the Limited Partners liability is limited to their investment in the partnership. There must be at least one General Partner (often holding at least 1 equity interest in the partnership. The General Partner manages the business (does the trading) and has unlimited personal liability. This is much more expensive to form and to operate than would be for a General Partnership. State quotblue skyquot laws may cause additional complexity. Losses allocated to a Limited Partners may need to be recharacterized from fully deductible quotordinary lossesquot to deferred quotpassive lossesquot under treasury Regulation 1.469-5T which states that he will be denied ordinary loss treatment unless he meets at least one of the following three tests: The individual participates in the activity for more than 500 hours during such year (700 hours per year in certain cases) The individual materially participated in the activity (determined without regard to this paragraph (5)) for any five taxable years (whether or not consecutive) during the ten taxable years that immediately precede the taxable year The activity is a personal service activity and the individual materially participated in the activity for any three taxable years (whether or not consecutive) preceding the taxable year or Limited Liability Limited Partnership (LLLP): Sim ilar to a Limited Partnership, except that the liability of all partners in a limited liability limited partnership is limited to the amount of their investment in the firm. An LLLP is a limited partnership that registers in the LLLP form. The LLLP form primarily is used to convert an existing limited partnership previously created under state law. It also is used as an alternative to forming an LLC in those states that allow foreclosure of an owners business interest, and forced liquidation of the business, by the owners personal creditors. Colorado, Delaware, Florida, Georgia, Maryland Nevada and Texas (and possibly others) recognize the LLLP. Family Limited Partnership (FLP) : A Limited Partnership whos partners are comprised of family members. The purpose of which is usually to attempt to legally shift taxable income away from higher tax brackets, into lower brackets and to offer some level of legal asset protection. This entity is also used in more aggressive estate planning by transferring equity ownership from a parent (the General Partner) to children or grandchildren at rates that are discounted 10 to 20 due to the limited rights conveyed to Limited Partners. More aggressive discounting that is usually audited by the IRS has gone as high as 40 to 50 or so. Other benefits and detriments are basically the same as for the Limited Partnership. The basics principals of a FLP may also be had by forming a Family Limited Liability Company. This is much more expensive to form and to operate than would be for a Family General Partnership. Pursuant to the recent 2003 Tax Court case, Estate of Albert Strangi v. Comm our Attorneys have provided this list of steps to take to secure that FLP assets stay out of your estate: Personal use assets, such as a personal residence, should not be held by the FLP. Assets to support your lifestyle should be retained outside of the FLP Multiple family members should contribute assets to FLP. FLP assets should be recorded in the name of the FLP, not held as nominee. More than one person should hold voting interest. A trust with an independent trustee should be a partner. Annual financial statements should be given to partners. Capital accounts should be properly maintained. Ownership percentages should be adjusted for any capital moved in or out. Distributions should be made pro-rata. Do not pay personal expenses from the FLP. Do not commingle personal assets and FLP assets. Avoid partner loans. Make all federal and state filing in a timely manner. Charitable Family Limited Partnership (CFLP) : A Family Limited Partnership that makes a deductible charitable contribution of a partnership interest to the charity of their choice. Though not usually used for Securities Trading, the CFLP can be a good supplemental estate planning tool. See leimbergsoftwarecharflps. html for more detailed information. Other benefits and detriments are basically the same as for the Family Limited Partnership. This is much more expensive to form and to operate than would be for other forms of Partnership. Limited Liability Partnership (LLP): Similar to a Limited Partnership generally with the exception that the General Partner does not have unlimited personal liability. A partner in a registered Limited Liability Partnership is not individually liable for debts and obligations of the partnership arising from errors, omissions, negligence, incompetence, or malfeasance committed in the course of the partnership business by another partner or a representative of the partnership not working under the supervision or direction of the first partner at the time the errors, omissions, negligence, incompetence or malfeasance occurred, unless the first partner: 1) Was directly involved in the specific activity in which the errors, omissions, negligence, incompetence, or malfeasance were committed by the other partner or representative or 2) had notice or knowledge of the errors, omissions, negligence, incompetence or malfeasance by the other partner or representative at the time of occurrence. Family Limited Liability Partnership (FLLP): This is a limited liability partnership (LLP) in which most of the partners, are related. All partners must be natural persons or persons acting in a fiduciary capacity for natural persons. Family-owned firms may benefit from the use of the family limited liability partnership (FLLP) form. Limited Liability Investment Company or Hedge Fund: Generally, an quotinvestment companyquot is a company (corporation, business trust, partnership, or limited liability company) that issues securities and is primarily engaged in the business of investing in securities. For our purposes here this basically means a quothedge fund. quot Investment companies are regulated primarily under the Investment Company Act of 1940 and the rules and registration forms adopted under that Act. Investment companies are also subject to the Securities Act of 1933 and the Securities Exchange Act of 1934. For the definition of quotinvestment company, quot you should refer to Section 3 of the Investment Company Act of 1940 and the rules under that section. An investment company invests the money it receives from investors on a collective basis, and each investor shares in the profits and losses in proportion to the investors interest in the investment company. The performance of the investment company will be based on (but it wont be identical to) the performance of the securities and other assets that the investment company owns. Some types of companies that might initially appear to be investment companies may actually excluded under the federal securities laws. For example, private investment funds with no more than 100 investors and private investment funds whose investors all have a substantial amount of other investment assets, quotaccredited investors, quot are not considered to be investment companies - even though they issue securities and are primarily engaged in the business of investing in securities. This may be because of the private nature of their offerings or the financial means and sophistication of their investors. For additional information on these types of private investment funds, please refer to this link on hedge funds. Hedge funds generally rely on Sections 3(c)(1) and 3(c)(7) of the Investment Company Act of 1940 to avoid registration and regulation as investment companies. To avoid having to register with the SEC the securities they offer, hedge funds often rely on Section 4(2) and Rule 506 of Regulation D of the Securities Act of 1933. In the past, to be exempt from U. S. taxes, the investment fund could be managed in the United States but had to conduct the 10 functions known as the quot10 commandmentsquot through its offshore office. These functions consisted of: communicating with shareholders, communicating with the general public, soliciting sales of its own stock, accepting new subscriptions, maintaining principal corporate records, auditing its books of account, disbursing certain payments, publishing or furnishing the offering and redemption price of shares, conducting director and shareholder meetings, and making redemptions of its own stock. Under current law fund managers can decrease costs and shift jobs back to the United States. However, many predict U. S. fund managers with non-U. S. investors have moved slowly to remove all offshore administrative functions because non-U. S. investors still may fear that investment in a U. S. fund without an offshore office could potentially subject them to U. S. taxes. Limited Liability Company (LLC): This is a form of business organization combining the features of a corporation and a partnership (or sole-proprietorship). An LLC is similar to a Corporation but without finance restrictions that require capital and surplus accounts and the need for a board of directors to manage its operations. Also, like the shareholders of a corporation and the limited partners in a limited partnership, the owners of an LLC (called quotmembersquot) are not personally liable for the LLCs debts the members losses are limited to the amount of their investment. Unlike limited partners, members of an LLC can take part in day-to-day operations. Like an quotSquot corporation and a limited partnership, an LLC does not have to pay federal income tax its members pay taxes on their share of the income on their personal tax returns. Two basic versions of the LLC exist: the one member LLC and the multi-member LLC. Be aware that a one member LLC (unless a proper election to be taxed as a corporation is made) is disregarded or ignored for IRS tax purposes. It is generally a wise move to form a multi-member LLC, rather than a one member LLC. Most LLC statutes provide that members may appoint managers and officers to run the day-to-day affairs of the business, or that the members may reserve management to themselves. To assure that the members are actively involved, the use of managers or officers is not desirable. The securities trader must be alert to the passive loss rules which under treasury Regulation 1.469-5T states that he will be denied ordinary loss treatment unless he meets at least one of the following seven tests: The individual participates in the activity for more than 500 hours during such year (700 hours per year in certain cases) The individuals participation in the activity for the taxable year constitutes substantially all of the participation in such activity of all individuals (including individuals who are not owners of interests in the activity) for such year The individual participates in the activity for more than 100 hours during the taxable year, and such individuals participation in the activity for the taxable year is not less than the participation in the activity of any other individual (including individuals who are not owners of interests in the activity) for such year The activity is a significant participation activity for the taxable year, and the individuals aggregate participation in all significant participation activities during such year exceeds 500 hours (700 hours per year in certain cases) The individual materially participated in the activity (determined without regard to this paragraph (5)) for any five taxable years (whether or not consecutive) during the ten taxable years that immediately precede the taxable year The activity is a personal service activity and the individual materially participated in the activity for any three taxable years (whether or not consecutive) preceding the taxable year or Based on all of the facts and circumstances, the individual participates in the activity on a regular, continuous, and substantial basis during such year. A web site devoted to provided everything you can imagine about LLC formations: llcformations LLC taxed as a Sole Proprietorship: All States except Massachusetts allow LLCs to be formed having only one member. Per IRS guidelines these are quotdisregarded entitiesquot for most tax related purposes. Benefits: Nothing really over an individuals sole proprietorship. Perhaps some level of legal protection is available by having the assets held in the name of the LLC. The tax forms used are form 1040, Schedule C, and Schedule D or form 4797. Arguably, a somewhat lesser standard of material participation could be required for a member of disregard LLC than would be for a sole proprietorship, (Gregg v. U. S. 112900). Detriments: Extra paperwork and confusion, basically for nothing. LLC taxed as an Entitys Disregarded Entity: All States except Massachusetts allow LLCs to be formed having only one member. Per IRS guidelines these are quotdisregarded entitiesquot for most tax related purposes. LLC taxed as a Partnership: Most States allow LLCs to be formed with two or more members. The IRS has quotcheck the boxquot regulations that default to taxation as a partnership. The tax form used is form 1065. Tax Court has determined that a partnership exists when the economic benefits enjoyed by the co-owners results not from mere co-ownership of the assets, but from the pursuit together of a common goal. (Bergford 1993, Bussing 1988, Alhouse 1991) Benefits: Members may not get paid a quotsalaryquot or quotwages. quot In lieu of salary, earned income may be paid as quotconsulting feesquot or quotguaranteed payments to memberspartners. quot These are taxed to the member (not to the LLC) for SECA purposes (similar to FICA and Medicare). Once quotearned incomequot is generated as per the above, you may receive (if desired and if structured properly) a tax deduction for payments made for health insurance and retirement plan contributions for yourself and family members. LLC taxed as a C-Corporation: Most States allow LLCs to be formed with one, two or more members. The IRS has quotcheck the boxquot regulations that allow the LLC to elect to be taxed as a corporation. The tax form used is form 1120. Benefits: A limited amount of Federal income tax savings by shifting up to a maximum of approximately 250,000 of taxable income to the lower corporate tax rates. A limited amount of State income tax savings by shifting up to a maximum of approximately 250,000 of taxable income to a State that does not tax corporate profits. Ability to pay yourself or family members, as employees, earned income in the form of a salary from the corporation. This salary is subject to FICA (6.2 plus a matching 6.2) and Medicare tax (1.45 plus a matching 1.45) for a total tax of 15.3 of approximately 100,000 of your annual earned income (2.9 thereafter) which is credited to your ability to collect Retirement Social Security, Spouses Retirement Benefits, Disability, Family Benefits, Survivors Benefits, Medicare, Medicaid, amp Supplemental Security Income. These extra taxes may run up to approximately 15,000 per employee earning greater than 100,000. The salaries are tax deductible from corporate income in the year paid by the corporation (which generally must be the same year it is picked up as income by the family employee). One half of the above tax (6.2 plus 1.45) is tax deductible from corporate income when paid by the corporation. In lieu of salary, earned income may be paid as quotconsulting fees. quot These are taxed to the consultant (not to the corporation) for SECA purposes (similar to FICA and Medicare). Once quotearned incomequot is generated as per the above, you may receive (if desired and if structured properly) a tax deduction for payments made for health insurance and medical expenses, childrens day care, quotcafeteria plansquot and retirement plan contributions for yourself and family members. LLC taxed as an S-Corporation: Most States allow LLCs to be formed with one, two or more members. The IRS has quotcheck the boxquot regulations that allow the LLC to elect to be taxed as a corporation. Taking that a step further, the corporation may then elect to be taxed under Subchapter S, thereby allowing most items to be passed through the corporation and taxed much the same as would be done with a partnership. The tax form used is form 1120S. Benefits: A Sole proprietor or a single member LLC generally files on Schedule C, which because it always shows losses, can be subject to audit under the quothobby lossquot rule as well as other audit programs that are run from time-to-time. A single member LLC that elects to be taxed as a corporation does not file Schedule C, but rather files form 1120. Such a corporation that elects to be taxed under Subchapter S would file an 1120S and then pass most items through the corporation to the sole-owner who in turn would report the numbers on his own form 1040, Schedule E. A limited amount of State income tax savings by shifting up to a maximum of approximately 250,000 of taxable income to a State that does not tax corporate profits. Ability to pay yourself or family members, as employees, earned income in the form of a salary from the corporation. This salary is subject to FICA (6.2 plus a matching 6.2) and Medicare tax (1.45 plus a matching 1.45) for a total tax of 15.3 of approximately 100,000 of your annual earned income (2.9 thereafter) which is credited to your ability to collect Retirement Social Security, Spouses Retirement Benefits, Disability, Family Benefits, Survivors Benefits, Medicare, Medicaid, amp Supplemental Security Income. These extra taxes may run up to approximately 15,000 per employee earning greater than 100,000. The salaries are tax deductible from corporate income in the year paid by the corporation (which generally must be the same year it is picked up as income by the family employee). One half of the above tax (6.2 plus 1.45) is tax deductible from corporate income when paid by the corporation. In lieu of salary, earned income may be paid as quotconsulting fees. quot These are taxed to the consultant (not to the corporation) for SECA purposes (similar to FICA and Medicare). Once quotearned incomequot is generated as per the above, you may receive (if desired and if structured properly) a tax deduction for payments made for health insurance and retirement plan contributions for yourself and family members. Detriments: None except that this is a convoluted setup up and S-Corps in general have many traps for the unwary. The IRS might someday challenge this whole set-up as a step-transaction having no valid business purpose if they thought theyd be getting more taxes by doing so. UPDATE: in October 2001 the IRS has given its blessing to our quotLLC taxed as a C-corp taxed as an S-corpquot proposal. Proper, formal books and records are a quotmustquot as this must show every sign of being a bona-fide business set-up. This is a very sophisticated tax planning technique, best not attempted without careful consideration given to it. Series LLCs: Delaware and several other State have started to allow these specialized LLCs to be formed. It is said that they offer better asset protection than regular LLCs. Any Partnership (from above) electing out of subchapter K : Benefits: Allows two or more parties to formally and legally pool their resources in the joint venture style of partnership entity to trade securities as investors (but not as traders), yet remain independent with respect to their tax filings. البندان. 1.761-2(a)(2). Detriments: Requires extra paperwork and bookkeeping (mostly at the partner level, requiring the filing of form 1040, and a detailed Schedule D) as compared to a Partnership not electing out of subchapter K and just sending a Sch K-1 to each partner to include on their own Sch E as part of their form 1040 tax filing. If the Partnership return gets audited, you can bet that each partner will get looked at too. This is, in effect, a partnership tax return and two or more sole proprietorship tax returns. Therefore the tax compliance costs are higher than would be for just having a regular partnership or just having individual sole proprietorships. International Business Company (IBC) This is a corporation formed in a non U. S. country that is usually exempt from tax in the country where it is formed -- but it may not conduct any business in that country. For U. S. tax purposes, an IBC is generally treated the same as foreign corporation. U. S. persons who form and own a foreign corporation or an IBC may elect to be treated as a partnership or as a corporation by filing Form 8832 within the prescribed period of time. A single owner IBC may elect to be taxed as a corporation or as a disregarded entity. Benefits: Allows. Controlled Foreign Corporation (CFC) This is a foreign corporation owned by United States persons that own directly, indirectly or constructively 10 or more of the voting power and more than 50 of the equity. The so-called quot10 United States shareholdersquot Benefits: Allows. Passive Investment Holding Company (PIHC) Passive investments include, but are not limited to, certificates of deposit, commercial paper, accounts receivables, notes, stocks, bonds, and other business investments. Such investments produce income that is generally subject to state income tax. A Passive Investment Holding Company (PIHC) is an effective tool to centralize passive investments in a separate entity where they can be more effectively managed. It can also serve as a state tax shelter for the income produced by these assets. Under the typical scenario, a corporation forms a subsidiary in a tax friendly state. The passive investments are transferred tax-free to the newly formed subsidiary. The operating company does not report, except in states that require unitary or combined reporting, the income produced by the passive investments because they are owned, managed and controlled by the subsidiary. As for the PIHC, it escapes state taxation in its state of operation because it is set up in a low or no tax state or a state that does not tax income from passive investments. Suggested states where to locate the PIHC include Nevada, which has no income tax Delaware, which exempts holding company income from corporate tax when the companys sole activity in the state is the maintenance and management of passive investments or Michigan, where a deduction is allowed from the Single Business Tax base for dividends and interest. The result of this strategy is that the operating company will significantly reduce their state taxable income through the exclusion of the passive investment income. The PIHC, in addition to avoiding tax in its home state, is not subject to tax in the operating companys state because it has no physical presence there. The net effect of this corporate structure has been the production of quotnowherequot income that escapes income taxation in most states. The PIHC strategy is complicated and difficult to implement. Therefore, the assistance of a competent tax advisors and competent outside legal counsel should be sought, to assist in the development and implementation of this strategy Passive Foreign Investment Company (PFIC) If a foreign corporation is a passive foreign investment company or mutual fund, special rules apply. The U. S. shareholders are required to report their share of the income of the foreign investment company on their tax return each year, or to pay a penalty on any deferred income from the foreign investment company. Any shareholder of a passive foreign investment company are required to file Form 8621 for each such fund. (In a few cases, a foreign company might be a foreign personal holding company without also being a passive foreign investment company, but thats an unlikely circumstance.) If more than 50 of the foreign corporation stock is owned (directly or indirectly) by 5 or fewer U. S. persons, then the corporation will be a controlled foreign corporation. Those shareholders who own 10 or more of the stock are required to file Form 5471 each year with their tax return. If the foreign corporation has any quotsub-part F incomequot, the U. S. shareholders who own 10 or more of the stock will be required to include that income in their personal tax return even though it is not distributed by the corporation. The simplest explanation of quotsub-part F incomequot is that it includes passive investment income and certain types of income derived from buying or selling goods or services to or from a related person or entity. Those promoters who advocate the creation of a foreign corporation as way to avoid taxes on investment income are either ignorant of the U. S. tax rules relating to controlled foreign corporations or they are scoundrels who are not concerned about the problems they may be creating for U. S. persons. If a foreign grantor trust or partnership is a 10 or greater shareholder of a controlled foreign corporation, then the grantor of the trust or the partners will be treated as shareholders of the foreign corporation. If such a trust or partnership owns any stock of a passive foreign investment company, it will need to file Form 8621. rpifsoffshoretaxotcorp. htm Detriments: Requires filing a QEF election to avoid punitive tax rates. IRS releases final Mark-to-Market regulations for PFIC on April 29, 2004 T. D. 9123 Active Foreign Reinsurance Company (as popularized beginning in 1999 by Moore Capital Management) If a foreign corporation is an active business then the passive foreign investment company or mutual fund, special rules do not necessarily apply. Ordinarily, hedge fund investors pay either the 39.6 percent rate for ordinary income on their profits or the lower long-term capital gains rate (if a QEF election is made), depending on how frequently securities are traded, plus an extra 3.8 percent surcharge stemming from the Affordable Care Act. But if they put money into a Bermuda-based reinsurer and have it invested in the hedge funds, any profits go to the reinsurer, which doesnt owe tax on them. That allows the investors to defer taxes until they sell their stake in the reinsurer. Meanwhile, the money grows tax-free and the savings add up. Example: Investing 100 million in a hedge fund that returns 10 percent annually for five years and paying the top marginal ordinary income rate on profits results in an after-tax gain of 50 million. If a Bermuda reinsurer holds the same investment, the gain is 77 million. Benefits: Allows. Virtually unlimited deferral of income tax on the trading income and then when it is taxed, the tax rate is the preferential long-term capital gains rate. Detriments: The IRS considers some offshore reinsurance arrangements as nothing more than tax shams, either because they arent selling enough insurance or because the insurance they reported selling was outright phony. The IRS has stated that they quotwill challenge the claimed tax treatment, quot but the IRS has rarely if ever done so. Tax lawyers and insurance executives have said that they are unaware of any company thats been targeted by the IRS. DELAWARE PASSIVE INVESTMENT COMPANIES Delaware Passive Investment Companies are special purpose companies that, if properly structured and operated, can help achieve a variety of corporate objectives including but not limited to minimization of state and local income taxes and franchise or capital stock taxes. They can also be used to improve oversight and protection of intellectual property gain the benefit of Delawares large and stable body of corporate law improve procedures for allocating the cost of capital to members of the corporate group and bolster compliance with corporate investment policies. Qualified Electing Fund (QEF) In general, a U. S. taxpayer that invests in a PFIC may make a QEF election to include in gross income each taxable year the income of the PFIC. Benefits: Allows. Long-term tax treatment for the PFICs net long-term capital gains, rather than being taxed at the highest ordinary tax rate under the PFIC rules. (regardless of the tax bracket the U. S. taxpayer may be otherwise entitled to be subject to) The Revocable Living Trust Benefits: Allows traders to actively trade and protect their estate in the case on death or incompetence. Without a Living Trust assets more easily could come under the scrutiny of the Probate Court and, especially for unmarried couples . be subject to challenges by family members. Detriments: More complicated and expensive than a will alone. The need for a backup or pore-over will is still needed to cover those assets left out of the trust. IRA, self-employed 401k or other Retirement Plan s: Benefits: The earnings within an IRA or other retirement plan are generally tax deferred or even tax-free. Click here for much more info on Single-Participant 401k and Self-Employed 401k Detriments: Retirement plans are restricted on what they may use their funds for. To make matters worse, as new types of retirement plans are developed, the IRS Code amp Regs are not always conformed to include every type of plan. Earnings in an individual retirement account are generally exempt from tax. Certain investments result in the IRA having taxable income which is called quotunrelated business taxable incomequot (UBTI). UBTI is income from a trade or business regularly carried on by the IRA which is not substantially related to the exercise by the IRA of its tax-exempt purpose. It appears that any trade or business would be unrelated to the IRAs purpose. When annual UBTI exceeds 1,000 form 990-T must be filed and a tax paid. Estimated taxes are paid in advance using form 990-W amp form 8109. An example of what might constitute UBTI is an IRA that becomes a partner in a partnership where the partnership is in the business of Securities Trading. The IRAs share of this income is UBTI subject to tax. Therefore it could be argued that the earnings of an IRA or other retirement plan are actually UBTI if the IRA or other retirement plan is actively trading securities, swing trading or day trading since these types of activity are the Trade or Business of Securities Trading. Similarly, debt-financed property e. g. quotMargin Accountsquot could result in UBTI. Generally IRAs are prohibited from maintaining margin accounts, but the possibility of an IRA receiving income from debt-financed property is easily made possible when the IRA invests in a Securities Trading partnership or LLC. Additionally, IRS Code Sec 4975 lists various quotProhibited Transactionsquot which subject the plan or account to a 15 excise tax and can even result in a retroactive disallowance of the plan or account resulting in a premature total distribution of the assets to the beneficiary. The general rule is that the IRA or other Retirement Plan may not currently benefit an owner or beneficiary of the plan or account. Therefore it could be argued that, for example: if a brokerage account for an IRA was maintained at the same brokerage as a Securities Traders account and the assets within the IRA were used to secure credit for the IRA or for the other non-IRA plan, that a prohibited transaction has occurred. Bottom Line: Consider avoiding actively trading within an IRA or other retirement plan on your own. Should you trade to the extent that you are operating a Trade or Business, the gain would be subject to tax. Rather, consider investing in securities within the account. A few trades are certainly fine, but keep it well below the threshold of a Trade or Business especially if you have a taxable Trader Status tax return that could be used for a direct comparison as to what constitutes a Trade or Business. Before you trade extensively in your retirement account, see a tax professional who is familiar with trade or business UBTI and is an expert in trader status taxation. Steps can be taken to minimize negative tax exposure with the proper planning methods. IRA, self-employed 401k or other Retirement Plan deductions : To gain a deduction to a retirement plan for yourself you generally need to create earned income, income that is subject to SECA or FICAMedicare taxation. As a sole proprietor, a trader does not generate earned income directly from his trading gains. Earned income may be generated by paying a salary to your spouse or children and then a retirement contribution may be made based on that earned income paid. But that leaves you without a contribution made for yourself. A sole proprietor may not pay himself a salary. The use of a separate entity (or a spouse) can create the required earned income. A C-Corp or S-Corp, for example should hire the trader to work for it, making the wages paid subject to FICAMedicare. The corporation then would create a retirement plan. A multi-member LLC or Partnership may pay for services rendered to it by the trader in the form of a quotguaranteed payments to partners, quot which is subject to SECA taxation. The member or partner would then create a Keogh plan or other retirement plan. For 2003 SECA or FICAMedicare taxation is 15.3 on the first 87,000 earned by an individual plus 2.9 for anything beyond that. For 2004 SECA or FICAMedicare taxation is 15.3 on the first 87,900 earned by an individual plus 2.9 for anything beyond that. For 2005 SECA or FICAMedicare taxation is 15.3 on the first 90,000 earned by an individual plus 2.9 for anything beyond that. For 2006 SECA or FICAMedicare taxation is 15.3 on the first 94,200 earned by an individual plus 2.9 for anything beyond that. For 2007 SECA or FICAMedicare taxation is 15.3 on the first 97,500 earned by an individual plus 2.9 for anything beyond that. For 2008 SECA or FICAMedicare taxation is 15.3 on the first 102,000 earned by an individual plus 2.9 for anything beyond that. Generally for 2004 through 2008 the maximum annual contribution available for . a self-employed 401(k) or single-participant 401(k) Profit Sharing plan is usually 15,50020,500 up to 46,00051,000 . for 2008 this was 15,50020,500 up to 46,00051,000. for 2007 this was 15,50020,500 up to 45,00050,000. for 2006 this was 15,00020,000 up to 44,00049,000. for 2005 this was 14,00018,000 up to 42,00046,000. for 2004 this was 13,00016,000 up to 41,00044,000. an IRA 408 is 4,0005,000 plus 4,0005,000 for a spouse with no earned income. a SIMPLE IRA 408(p) is 10,00012,000 by employee plus 10,000 by the business. a SEP 408(k) is 25,500. a Keogh defined contribution 44,000 in a paired plan. a 415(b)(1)(A) Keogh defined benefit plan is 175,000 (170,000 for 2006). While you can form as many retirement plans as you wish, generally there is an overall annual contribution limit of 44,00049,000 unless a defined benefit plan is established. For most traders, if your broker offers it, the self-employed 401(k) is the best way to go. PDF file to calculate your own maximum contribution For 2004 most traders would need from 140,000.00 to 147,424.10 in earned income from their trading entity (or a spouse) to maximize their 401(k)Profit Sharing plan deduction at 41,000 (44,000 for those over age 49).The self-employment tax on that would be from 0 to 14,848. The federal income tax savings (using a 28 tax rate) would be 11,480 to 12,320. So you are basically able to sock away money onto a tax-deferred plan for little net difference in your annual tax bill. To maximize only the 401(k) component to 13,000 16,000 for 2004 most traders would need from 13,517.03 to 17,216.29 in earned income from their trading entity (or a spouse).The self-employment tax on that would range from 0 to 2,433. The federal income tax savings (using a 28 tax rate) would be 3,640 to 4,480. So you are basically able to sock away money onto a tax-deferred plan while the IRS puts some money into your pocket Profit Sharing amp 401(k) contribution limits (and catch-up 401(k) contributions for those over 49 years of age): 2002: 29,000 11,000 1,000 2003: 28,000 12,000 2,000 2004: 28,000 13,000 3,000 2005: 28,000 14,000 4,000 2006: 29,000 15,000 5,000 2007: 29,500 15,500 5,000 2008: 30,500 15,500 5,000 2009: 32,500 16,500 5,500 2010: 32,500 16,500 5,500 2011: 32,500 16,500 5,500 2012: 33,000 17,000 5,500 2013: 33,500 17,500 5,500 IRA contribution limits (and catch-up 401(k) contributions for those over 49 years of age): 2002: 3,000 500 2003: 3,000 500 2004: 3,000 500 2005: 4,000 500 2006: 4,000 1,000 2007: 4,000 1,000 2008: 5,000 1,000 2009: 5,000 1,000 2010: 5,000 1,000 2011: 5,000 1,000 2012: 5,000 1,000 2013: 5,500 1,000 Avoid California Double Taxation with an Out-of-State Entity: California, as is the case all other States, is able to imp ose taxation on your gains under the concept of quot nexus. quot In a nut shell nexus is created when an entity has a legal presence within the boundaries of the State(s). Nexus can be avoided if you carefully structure your business affairs to avoid any legal presence within the State. By properly using an out-of-state entity in such a way as to avoid a legal presence in CA (we show you how) you can avoid or reduce the CA double taxation on LLC and S-Corp gains. Dont think of this as a questionable tax evasion scheme, structuring your business to maintain nexus in another state is legal and proper. You do need to carefully document your business operations because if not, nexus might be established in CA in addition to the other state, making your gains at least partially subject to CA taxation. But dont be mislead simply forming a solely-owned Nevada S-Corp or C-Corp does not, in and of itself, change your CA nexus. As a California resident, your entity would likely be deemed to be a quotforeign corp. quot under State of CA laws. You must have nexus outside of CA, and preferably no nexus from within CA at all to avoid CA taxation. CA is aggressively pursuing these Nevada tax scams. Typical argument : What about a trading business which can be based from anywhere Lets say you have a home-based operation based outside of Nevada but that you incorporate in Nevada and set up nexus in Nevada. Lets say it is a one-person corporation. Do you have to register to do business in your home state where you are doing the trading out of your home Absolutely Why Because you are physically doing the work out of your home. You are not soliciting orders for the Nevada based office rather you are actually placing your orders, closing the transactions and collecting the money all at once This is the category most traders fall into A small portion of the above is Copyright 2002 Nevada Corporate Planners, Inc. All Rights Reserved and are reprinted here for example and educational purposes only. California Law in 2000. Learn why it is imperative for all California traders to carefully form new non-related pass-thru entities if the one you are using was formed before 2000. Similarly, learn why every CA sole-proprietor trader must form a pass-thru entity now . Become a client today California S-Corps are subject to an 800 minimum tax and a gains amp profits tax . California trader LLCs are subject to an 800 minimum tax and a gains amp profits tax . Most California non-trader LLCs are subject to an 800 minimum tax an d a gains amp profits tax, or a tax on gross sales, whichever is greater. Corporations that elect to be an S corporation for federal purposes on or after January 1, 2002. and have a California filing requirement are deemed to make the California S election on the same date as the federal election. Therefore, it is no longer required for file form FTB 3560 to elect. For new corporations that qualify or incorporate after January 1, 2000. the minimum tax is 0.00 for the first tax year, but is measured based on income for the year and is subject to estimate requirements and 800 minimum tax for subsequent years. S corporations must pay at least the minimum tax and any applicable QSSS annual tax each year. An S corporation that is the parent of a QSSS must pay the 800 annual tax for each QSSS The California Secretary of State requires corporations to file an Annual Statement of Officers. This filing requirement coincides with the date of incorporation. When a corporation fails to meet this filing requirement, the California Secretary of State notifies the Franchise Tax Board to assess and collect a 250 penalty. We may also impose an additional 150 for this collection action. New California Law in 2002. manager-managed LLCs in CA may need to comply with the 25102(o) filing requirements potentially within 30 days of formation or the 25102(f) filing requirements . Member-managed CA LLCs can avoid this complexity, so this is generally an issue for manager-managed tradinghedge funds. Colin M. Cody, CPA, CMA TraderStatus LLC 6004 Main Street Trumbull, Connecticut 06611-2400