Can that apply if I take Jan off? Also, been looking at 1256 as mentioned but IB requires 50k for futures and am not ready to dabble into options yet. I think currency falls in that umbrella but it's not as clear cut I think?
It might be good advice but you wrote it in the first days of January... Also, he could trade just not buy back what sold in mid-December...
Yes, take 30 days off in January and your wash sale problem will disappear (you can also trade different securities during those 30 days that are not "substantially identical" to the ones you have been trading).
Will do, thanks. I still have to report all wash sales is my understanding? Just won't be penalized when submitting losses?
Well, I would report what your broker reports to you just so that it matches. They will most likely have lots of intermediate wash sales transactions, but you won't be prohibited from taking the "final" loss if you don't trade in January.
Form a C-corp, not an S-corp or LLC. Open a brokerage account for the corp. The brokerage will provide you with a 1099 at the end of the year. Easy-peasy.
If your filing as a C corp for the only purpose of getting a lower tax rate on their stock profits when trading/investing is not a full time job that it could appear to the IRS calls "abusive tax shelter'. When in doubt.. doubt or better yet consult a tax professional in your state. Drawbacks of Using C Corporation Format The potential for "double taxation." The chief drawback of a C corporation is the so-called "double taxation" potential. "Profits are first taxed to the corporation," Weltman says. "Then, when they are distributed to shareholders in the form of dividends, they are taxed again; the corporation cannot deduct dividend distributions." However, the threat of a double tax can sometimes be mitigated for following certain strategies. The requirement to file more paperwork. Corporations are required to hold formal board and shareholder meetings and keep accurate minutes of these meetings. In addition, there are a series of tax forms that may need to be filed with federal, state, and even local officials, including corporate taxes (IRS Form 1120), taxes on salaries and other employee compensation (W-2s), and profit distribution to shareholders (Form 1099-DIV). "A C corporation complicates your life," Ennico says. "Most entrepreneurs I work with want to spend their time making or selling their products. They don't want to stay up until 3 a.m. doing paperwork." Corporations must have their own financial accounts and file the names of all officers with the state. Like corporations, a board of directors is established and it is this board that makes managerial decisions. A C corporation is owned by shareholders, who must elect a board of directors that make business decisions and oversee policies. In most cases, a C corporation is required to report its financial operations to the state attorney general.