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Old Oct 19th, 2012, 10:49 AM   #1
Opulence
 
 
Join Date: Mar 2012
Location: Atlanta, GA
Posts: 75
Would I benefit by setting up a corporation (or some business entity) in order to trade? I'm speaking more so on the issue of being taxed and potentially raising capital in the future. I currently trade by myself using my own money.

From what I understand, it can be costly to go through the process of setting up as a financial advisor if you plan to raise capital, but what about establishing an entity for my own one man operation (I'd like to call it a Hedge Fund, LOL)? Is that process any different?
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Old Oct 19th, 2012, 12:01 PM   #2
oldtime
 
 
Join Date: Jun 2011
Posts: 7,479
I don't know how it is now, but we talked a lot about that a while ago (like 10 years) and the general consensus was better to stay independent and just pay cap gains, once you form an entity you are subject to SE taxes. But maybe people think differently today.
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Old Oct 19th, 2012, 12:10 PM   #3
Brighton
 
 
Join Date: Sep 2012
Location: Minnesota
Posts: 451
You might check the Green & Company website. There is a lot of free information (documents, videos). If nothing else, the information should help you form specific questions you'd like answered during a free (but brief) consultation with Green or other professional services firms.

Note: I'm not a client of Green & Company. I came across their website while surfing for trade accounting software. I did buy Trade Log from Armen Software and I'm happy with it.
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Old Oct 19th, 2012, 12:38 PM   #4
oldtime
 
 
Join Date: Jun 2011
Posts: 7,479
Quote:
Quote from Brighton:

You might check the Green & Company website. There is a lot of free information (documents, videos). If nothing else, the information should help you form specific questions you'd like answered during a free (but brief) consultation with Green or other professional services firms.

Note: I'm not a client of Green & Company. I came across their website while surfing for trade accounting software. I did buy Trade Log from Armen Software and I'm happy with it.
wow, that Trade Log looks pretty nice. How does it get the info from the broker? I see my broker (ib) is listed, but what is the procedure to enter the trades into Trade Log?
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Old Oct 19th, 2012, 12:40 PM   #5
Free Thinker
 
 
Join Date: Nov 1999
Posts: 14,316
Quote:
Quote from Opulence:

Would I benefit by setting up a corporation (or some business entity) in order to trade?
probably not. you would surely benefit your tax preparers though.
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Old Oct 19th, 2012, 12:54 PM   #6
NoBias
 
 
Join Date: Jul 2012
Posts: 189
Quote:
Quote from oldtime:

wow, that Trade Log looks pretty nice. How does it get the info from the broker? I see my broker (ib) is listed, but what is the procedure to enter the trades into Trade Log?
It is a Simple procedure, you set up the account in the program, IB import Brokerconnect, it connects to IB, signs you on, prompts you for your secureID, then imports transactions automatically.

Then you run a few filters to match a few open transactions, if you do it monthly it isn't much maintenance at all.

Best time to do it is 1st of year, and try to be flat at end of year to avoid the nuisance of identifying positions to be carried over

If you choose Mark to Market accounting, once you do the initial setup, it is painless each year. If you primarily trade futures and Forex, do not believe it makes much difference. Standard license should be fine.

In any event, it comes with sufficient tutorials which walk you through the setup procedure.

It definitely saves money with my accountant each year

Ref: Creating a business entity or LLC for personal trading, doubt it necessary, as others pointed out - best advice is to ask YOUR accountant for YOUR personal situation.
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