Do I need to incorporate a partnership or anything?

I'm running about a half a million in a taxable account in California, mostly selling short-term option premium, about half of which is Sec. 1256, the rest equity. I fear my tax bill? Anything I can do? Or just suck it up and try to get more Sec. 1256?

 

Move to Texas .HI Yo Silver

 

These kind of questions reflect the character of the writer. None of which are complementary.

 

A good listen from someone who just move to NV from CA...

 

Don't know about Cali, but, generally, if you set up a corporation, partnership, etc., you've just made that entity pay the tax, rather than yourself. For federal income tax purposes, corporations are subject to a 21% tax rate, so if Cali follows that system you might save some money initially... but keep in mind if you ever take your profits out that will be subject to a second tax, possibly at a 37% rate. And that 21% rate could be going up in the near future thanks to our good business-friendly friend who was just elected president. So be forewarmed...

 

And if you don’t take profits, there’s Accumulated Earnings Tax to deal with.

 

Depends on your structure. And if you arent dumb, you can avoid double taxation. Also having a biz lets your write a ton of shit off to offset it. Playing the tax game is how you get wealthy.

 

Since tax avoidance is legal, any suggestions?

 

llc or s corp prevents double taxation.

 

Well, sure, when they are pass-through entities. I am asking how to pay flat Corp tax AND avoid double taxation.
@BMK, any suggestions?