Sorry guys, I 'd mean to cause a fight with my question. I just wanted to know if an entity (S-corp, C-corp, LLC, or He-man Woman Hater's Club) could be used to get around the fact that given my full-time job (and perhaps my limited activity), I probably don't qualify for "trader status". Subsequently, if I were to explore this route, would I then be a nasty audit waiting to happen? Semper
To take the trader deductions (which flow thru to you) you would have to also have to qualify as a full time/part trader. I know there are a couple tricks to this that may even make it work for you-from solid CPA info, but my opinion is that it wouldn't stand up to an audit. As far as audit chance.......your 97% safe. My trader expenses are low(how many PCs can you buy in 1 year!)-so the trader status does save a buck........but its not a huge deal if your making good money at it anyway. It all dependes on how much you make -or lose, that makes the trader status important. QUOTE]Quote from sempergumby: Sorry guys, I 'd mean to cause a fight with my question. I just wanted to know if an entity (S-corp, C-corp, LLC, or He-man Woman Hater's Club) could be used to get around the fact that given my full-time job (and perhaps my limited activity), I probably don't qualify for "trader status". Subsequently, if I were to explore this route, would I then be a nasty audit waiting to happen? Semper [/QUOTE]
As much changes during the course of a year, the setup of an S-corp has been succeded by the now so popular way of conducting business as an LLC. You are able to be taxed as an S-corp when you set up your LLC when you elect yourself as a sole member.
Correct me if I'm wrong, but aren't single member entities viewed as "disregarded entities" by the IRS? Semper