Is there a tax advantage to funding an account with corporate funding versus a personal account.
I have a small corporation formed for another business, which gives me tax advantages. I am in the U.S.A.
Would there be any tax advantages to funding an account with my corporate account rather than my personal? Or are profits in forex strictly taxed x amount on the profits over initial funding regardless of if it is a personal account or a corporate? Again, I’m talking about the U.S.A. here.
OH YES, YES, YES, YES, YES, YES, YES !!!
just go over the tax advantages of corporations vs. personal taxes paying MUCH attention to what a corporation can write off and yee shall never ask that question again.
lets see ---- cars, boats, homes, helicopters, trips to st tropez, collections of artwork, cost of corporate offices, CEO “perks”, sheltering of the first $250K (has that gone up yet ?)
AND ON AND ON AND ON AND ON AND ON AND ON AND ON AND ON AND ON AND ON AND ON AND ON AND ON AND ON AND ON AND ON !
Be smart and you could only be stuck with cap gains by getting around the divident thingie !
Be even smarter and live in the Camann Islands ---- [B]TAN AND TRADE[/B] — snappy title for a book, huh !
AND JUST THINK — when you get as good as me, if that can EVER be accomplished in one lifetime, you already have the basis for your hedge fund, ready and waiting !
enjoy and trade well
mp
[B][I]Men occasionally stumble over truth, but most of them pick themselves up and hurry off as if nothing had happened.[/I][/B](Winston Churchill)
I don�t agree with you mp6140, I think depends of your sight, if you are a beginning tiny corporation, it could be the same as a rich person known for everybody.
my apologies barryrian
but being tired after so many hours of watching things moving in abstract patterns all over the place, im afraid I dont fully understand the thought.
my apologies
mp
Do a corporate loan to yourself and then pay your deposit. If a corporation deposits money that does not include your name in the business title. You will be a agent for that corporation. And need to register with the NFA. The benefits are the same for person and corporation. If you claim trader status you will have more benefits than a person or corporation. Its not hard to get trader but the first year you claim it expect a correspondence audit. You just mail in a notorized list of your trades for the year. You may want to get the loan from the company then re-invest that into thee company. And you cant cherry pick your quarters anymore. I am not a CPA I am just speaking from my experience. My advise is consult a tax lawyer,and CPA
You have overlooked the liability questions, the cap gains vs salary questions and the ability of the corporation to include holding companies and legally trade and bank offshore.
Even as an LLC, while liabilities are reduced, you are still taxed as a parter in the LLC, which many would love to have go away.
of course one should check with an accountant, but the advantages of corporate (legal entity vs real person) taxes and “perks” are why we have corporations in the first place.
IMHO
mp
You dont have customers or sell a product so there isnt any liability. With a LLC, S/C corp. you cant beat traders status. To let you know without any clients you cant have a offshore business with out a partner or client/agent in that country. You may have not heard but judges have been piercing the corporate veil to retrieve damages and taxes. Tax advoidance and tax evasion is in the eyes of the judge. A IRS agent only has to say they dont have all the imformation to see if a crime occurred. Then with that judge’s judgement will get a swiss account open. Because tax evasion is a crime in Switzerland. I think you caught up with the ideal of protection and liabilities. When you trade you are the liability. I have a friend he doesnt trade but owns a restaurant he got slammed because the corporate veil cannot be pierced if you presented an honest effort and what ever went down was no fault to your own. You make the trade its a bad decision on you. You can beat being taxed at 19% on net income.
19% is something I would gladly pay in taxes, even in advance, but my corp DOES have clients and incurs the possibility of liabilities, which of course is the reason I mention it many times.
A single trader, as a single trader does not have freedom from liability or the multitude of loopholes available to a corporation — there is NOTHING that can be countered to that !
I am fully aware of how business is transacted offshore, which is why i have no fears of publishing the words here — do it right and do it honestly and there are some amazing advantages, although offshore banking and trading is NOT the subject of what i wrote, but rather THE advantages of a corporate entity over that of a sole proprietor or an LLC. Offshore was just a throw away !
for gollies sake, you can take a salary of $1.00 (PERFECTLY legal in the USA) and use the corporations assets completely legally, writing down the expenses but ABSOLUTELY minimizing your personal income taxes.
If i remember correctly, when Steve Jobs came back to Apple, he took no salary, but did NOT refuse the perks, which were a LIABILITY and therefore a writeoff to the company and an untaxed ASSET to him. And he got a LOT of perks !
One has to be careful and not get stupid about it all, but there are so many LEGAL deductions and methods of earning a fairly tax free income, that it is the reason why accountants can live so nicely.
Heck, once the Mafia incorporated its businesses, than one immediately knew it was the way to go !
LOL
mp
I agree that you can go offshore and accept $1 salary. Trader status beats corp tax status. Trader status you get all the corporate write offs and you pays less in taxes than a corporation would. You manage others funds so you dont qualify for trader status then its in your best intrest to have a LLC/s-corp, church sole. For someone trading without a product or service its a waste of time.
Here is happy mp the trader, with a decent account in the mid 6 figures area, and one day i am at a party and have two drinks, and while driving home an old man rams my car.
My alcohol level is taken at the scene, and I blow twice as much as is the legal limit ! The old man has NO alcohol in his system.
The old man dies from a heart attack, leaving 15 sons and daughters of which one is a crack lawyer ---- GUESS WHERE MY TRADER (sole proprietorship) status leaves me now ?
If you DO NOT think of possible future ramifications of earning big bux without a shelter from liability, you are doing yourself one tremendous disservice, and leaving yourself WIDE OPEN !
no matter what you do or dont manufacture, NOT protecting yourself and your family from lawsuit is a complete disregard for possible events.
You cant go thru life saying “it wont happen to me !”
Cause thats just the time it does !
Now you cant tell me in a post that being a $1.00 dollar a year man is very possible (offshore or not) and then switch to “theres no difference between trader status and corporate accounting” — Im sorry, but you cant logically do that !
enjoy and trade well
mp
Ok asset protection will not apply to your passive income when you are at fault. If you have a ashton martin and a 7 million dollar house. But only make 1 dollar a year. The do whats called a comfortable yearly income assessment. When you trade its not a sole proprietorship. The IRS looks at at as a skill set. Professional gamblers arent sole proprietors. They live of a skill set In that event you only have to move your money to a marketing bank account. Your income from trading and accidents have nothing in common. You cant win a judgement from a gambler. Traders have no job they speculate the market. Speculating forex is unregulated so until it becomes regulated you dont need asset protection. Because you dont have a job. You have been sold a idea that doesnt apply. You need asset protection when you put down a EIN on your taxes. See what your assets are when you go to a bank say that you lost moneey in the market and need a loan. You are technically unemployed.
I shall let this drop as I’ve been doing a variety of “things” for 40 years and long ago learned to protect assets as the number one thing after MAKING assets.
let the OP check with a lawyer and accountant and make up their own mind on the situation, but if they intend to make any money at all, and its amazing how quickly it builds with or without partners, then first and foremost is asset protection.
While all of what you say has merit, understand that if its good enough for the Mafia, its good enough for me and while the US Attorney General may go after THEIR income, none of us fall into that realm, and few in the IRS are willing to expend the requirements to break down the “wall” of protection that a corporation provides, especially as we are simply “little fish” in the IRS agenda !
Years ago the IRS concentrated (for about a year and a half) on the movie industry, trying to determine who were independent contractors and who werent — it wasnt very hard, once they got going, to simply set up your business to get around their regulations ---- as a trader you are considered a sole proprietor (once you have set up your mark to market and trader status) and thats how it is, because IRS must have SOMEPLACE to put you, and unemployed is NOT it, or they would consider any winnings while trading as “panhandling !” (and we know that aint true — its income that you can reduce with losses or in other words, a SOLE PROPRIETORSHIP and an AKA !
I grow tired of discussing what any lawyer or accountant will tell you as fact, although the LLC is now the “popular” venue for non sole proprietors. Its only problem is that as a “partner” in the business, any profits become taxable as personal income, which is MUCH easier to get around as a corporation.
What appears to be a higher rate of taxation in corporations is offset in spades by the deductions you are allowed that you CANNOT TAKE as a proprietor — can you accumulate hundreds of thousands of dollars of “artwork” (which could easily be an Aston Martin DB4 Vantage that you actually drive) as a sole proprietor — NOPE !
But truly, one has the Aston registered to the corporation and the corporation has provided a nice 7 million dollar home for you to live in, and while you need to prove income from SOMEWHERE, you dont need to prove much because EVERYTHING in your life is being provided, tax free and legally under corporate law ! Just dont go getting stupid about what you do
the discussion is silly at this point — corporations can engage in trusts, holding companies and a dozen more shelters that are simply not worth the IRS’s time to break down when profit is only a few thousand dollars.
but im out of this one now – will continue as a corporation, enjoying the things that dont exist and secure in my protection from liability as long as the corporation doesnt do anything wrong.
Remember please, that contained within the letters “LLC” are the words “LIMITED LIABILITY” — you get the protection of the corporation with the taxation of a partnership/sole proprietor ! (which is essentially the same taxes !)
ps – i presently have a lawsuit aimed at the corp holdings from a personal incident that I won in criminal court ---- present time has their lawyer (civil court) pretty much giving up because of the enormous time, money and effort it would take to break down the wall, all for what is in reality a pittance !
protection of self is the all empowering asset of the corporation and applies to military actions, robbing a bank or having sexual relations with a stranger !
enjoy and trade well
mp
Thanks for all the input. I guess I’ll just start my first accounts(s) with my corporation in case I do start making money in forex, that way I won’t have to open another account after the fact and muddy everything up.
Are losses write offs for my corporation then?
[B]considering how much youre allowed to aquire before calling a dividend, it is a foolish corporation that makes a lot of money in the first few years !
LOL
mp[/B]
My CPA is an ex IRS guy, so if I need to I’ll let him steer me through any tax loopholes. He does a pretty great job without doing any stupid things that would cause an audit.