Hello, Going thru a divorce. Traded part time before getting married, went full time during marriage. Only traded my own money & didnt work for anyone else. That has become my sole source of income. During a divorce, could my daytrading be considered a business in which the spouse would be entitled to a chunk of the "business"? I only file on sched D and form 8949. I dont have it set up as a business. But would a court consider it a business? Thanks
Let me manage it for ya... her ass will be lined up at the f'n soup kitchen. She'll be sending you checks. j/k... GL
If I recall right, she most likely be entitled to half the funds in the account, if that is all the funds you have in the marriage, but best to ask your attorney.
I am talking about half of the future profits of the "business", even though it isnt filed as a business. Could she be considered half owner of the business, therefore half the future profits of it, even after the money split? If it was a retail business that was opened, lets say a drug store, she would be entitled to half the business including half the future profits. Would that be the case with being an independent daytrader who doesnt file as a separate business, just Sched D & Form 8949?
DDDD. David Donner talking about Daytrading & Divorce. Sounds funny, and weird. That sounds, technically and legally, more like a casual hobby or endeavor. -- Far from a normal or real business. I can't imagine she would be entitled to future and forever profits from you doing that. But with all legal and accounting questions...Ask real local professionals, not random dudes on a forum who can't trade. 2018 ET. Make Trading and Your Life Great Again. Divorce is liberating...High-Five`
Don't ask here. It varies so much by domicile. If you would owe spousal support based on whatever your domicile allows for and you don't have a real job you will be imputed an income and pay based off that. It's all negotiable after that, she may go for a true up based on your actual income, quarterly, yearly, etc. Get a really good lawyer, not an et lawyer.
So think about it; how much could you sell your "business" for? $0.00? She is entitled to half of that value, in the States.
Ah my area of expertise. The question you have to ask yourself is: are you principled or do you not care what happens so long as you get out? If it is that you are principled and you don't want to give her anything for the principle of it, then you're going to be miserable and you'll still lose most of your money. If you don't care what happens so long as you get out: give her 60% (which is better than she'll ever get, ever - esp if she's working) with the contingency that if she does not accept you will lose 100% going to court and you will go all the way, with all the experts, etc. You also get her to agree that you owe her nothing going forward. You also need to assess your stbx: does she want to "get you back" for anything, or is she happy to move on? If so, the above is likely to work. With day trading, you can make as much or as little as you want. This matters. I bet you're going out on a year following a very good year aren't you? If it goes to court because she or her lawyer are idiots, make it go really, really, really long. Set it up so that you need 100% of the capital to generate $100K/year. Do not agree to any intermediate agreement. That's how lawyers ensure a cash flow. Make sure her lawyer understands that she doesn't have any money and you will spend 100% of your money on your own lawyer, and that her lawyer will get nothing. Of course, you should do this in a way that isn't confrontational. They can do the probability calculations in their heads very well. $20K now, or $0K later + time spent, no brainer and they move on to the next sucker(s). Something like: "you know, if this goes on for much longer, all of the money is going to $MYLAWYER." Divorce and marriage are the biggest legal crock ever invented. Don't get married. Waste of time. I have 3 women I see regularly, all younger than 26, working on adding a 20 year old. Edit: and to answer your actual question: yes, it will be considered a business, but you can definitely make a case for keeping the capital in the business as you need it to generate income. The case you can make to her is: you can get half the capital appreciation since marriage, or alimony for 5 years based on my trading income of $X.