Registered: Jan 2002
08-14-12 12:07 AM
I have been running my trading business as a proprietorship under section 475 (number changed recently) for about 14 years now... No problem with the IRS - was audited twice and they gave me no grief (or fines etc) whatsoever. They were actually very polite, but they do like lots of information, which we traders should have available. The first time they wanted me to supply a more complete cost data set, and the second time they wanted to see all my business receipts. It was a bother but no problemo either time.
Quote from PHOENIX TRADING:
...When I was operating as a sole proprietor it was superior to incorporating... I'm going to be operating my trading business as an LLC but that's just because I want to stack the odds in my favor of being considered a professional trader in the eyes of the IRS...