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Re: [DCTraders] Incorporating a Trading Business

From: user 9.
Sent on: Friday, September 16, 2011, 8:37 PM
Justin,

I incorporated (with an LLC as well) back in 2007 using Traders Accounting (www.tradersaccounting.com) but after 4 years am now planning to un-incorprate since the tax savings are not worth the paperwork/accounting expenses for me. Unless you have a large trading account and need a pension plan I don't think it is worth it since you need to pay a lot in tax filing fees ($300 per entity in MD) and do tax returns for each entity (accounting fees).  

Below is an excerpt from an email I sent someone else on the subject a while ago.
 
 
The real issue is if you want to get trader status which gives you mark to market accounting without reporting the transaction level detail and then how to do it - just apply or do it through an entity.  The advantages of using an entity are that it is easier to get.  BUT the entity is a paperwork headache in its own right.

Other sources of info are:
http://tradersaccounting.com/index.php
http://tradersaccounting.com/traders-accounting-software.php
    Inexpensive training cds on Trader Status, MTM and Tax issues
http://www.greencompany.com/EducationCenter/GTTResources.shtml
    Lots of good articles on MTM, Trader Status, IRS regulations
http://www.greencompany.com/EducationCenter/GTTRecTraderTaxStatus.shtml
    About Trader Tax Status
http://www.edaytradertax.com/tradermtm.htm
    Info about MTM
 www.traderstatus.com (Colin Cody in Conn) 

Good luck, Fred
 
From: Justin <[address removed]>
To: [address removed]
Sent: Friday, September 16,[masked]:49 AM
Subject: [DCTraders] Incorporating a Trading Business

Hi all,

I wanted to see if anyone had any good resources or knowledge about incorporating a trading business.  It seems to be pretty complicated, and determining what type of company and figuring out all the tax implications is beyond me. 

Some of the bits of info I'm looking for: what type of business and where to incorporate, tax treatment for investors (short term vs. long term gains), registration status I would need(Investment Advisor?), approximate cost, etc. 

Any information or insight would be appreciated.  If anyone has gone through this process, I would be willing to pay to have a consulting session.  Or a reference a good lawyer who is knowledgeable about laws for investment companies would be greatly appreciated as well.

Thanks,
Justin




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