Entity for traders

Discussion in 'Professional Trading' started by yxy, Feb 7, 2007.

  1. Only if a licensed trader works for a prop firm.

    My biggest concern with working for a prop firm is related to carry-over loss. Suppose I have 20K carry-over loss, and if I make 10K profit with K-1 from a prop firm, can I deduce my previous loss of 10K, and pay no tax on my K-1 profit? If I use a retail account, I know I don't have to pay any tax on profit up to 20K.
    #51     Feb 12, 2007
  2. Yeah Don, but we're talking about the issues of expense deductions and potentially about capital loss limitations as well. What does "mark-to-market" have to do about these issues ?
    When you say "record keeping hassles". you mean licensed professional traders don't have to account for their expenses ?
    #52     Feb 12, 2007
  3. OK, there are no "capital loss issues".

    What I mean by record keeping, is simply no matching of trades is required...which can be quite a hassle (I'm told).

    All expenses are run through the Clearing Firm, with the "outside" expenses submitted in December. This keeps the K-1 number at the lower amount, and no red flags.

    I'm not trying to debate anything here, I was just trying to help by sharing how things work at this level. Saving money and taxes by not needing "entities" is of value I feel.

    All the best,

    #53     Feb 12, 2007
  4. Don,

    Most prop firms don't do it. I can see the value of joining your firm instead of others.

    Does your firm offer options, future like vtrader?
    #54     Feb 12, 2007
  5. Some of our traders trade futures and options, but most don't. If you have a good understanding of the hedging techniques, then we can certainly entertain the idea.

    Feel free to call to discuss. 702.739.1393.

    #55     Feb 12, 2007