How To Qualify For Trader Tax Status For Huge Savings

Discussion in 'Taxes and Accounting' started by dealmaker, Feb 9, 2019.

  1. I’m trying to remember, why do some form two business entities? One to own the trading account while the other entity manages the account.
    #11     Feb 10, 2019

  2. That is one of several "purposes", but not necessarily reasons. The exact business, income, profit, and other factors, even geography, play into the reasoning and purposefulness. In some cases, the same outcome (such as in your cite) can be achieved via a single entity structure. A multiple entity structure IMO, based on my circumstances, would be for one or two reasons...
    1) C-Corps have access to MORE benefits. Some of those benefits, for example, medical expense reimbursements, I have no interest in. Existing S-Corp benefits work fine for me and my family.
    2) Transfer of income... C-Corps have lower tax rates than individuals. C-Corps, unlike pass-though entities, also have retained earnings. Dividends however, have double taxation.

    Again, there are many purposes for multi-entity structures, but no one-size fits all... determined case by case.
    #12     Feb 10, 2019
    yc47ib, S-Trader and Sweet Bobby like this.
  3. dealmaker