Hey all, I was looking for some advice on what the best way to set things up tax-wise for those of us intending to derive the majority of our income from trading. I have heard that it is best to form an LLC but that seems somewhat excessive. Advice? Thanks in advance.
I am not an attorney (/disclaimer). I was incorporated as an LLC for trading purposes for three years. I found a better way than the do-it-yourself LLC kit was to hire a tax lawyer to structure a set of entities to save me money. I now pay about half the tax that I did as a member of an LLC. I don't know what state you're in, so of course I recomend you see a tax attorney, but NOT a CPA or regular attorney. They won't know what you're talking about. If you're serious and your trading business generates sufficient wealth that you want to protect long-term, talk with a $500/hour tax attorney. IMO, anything less is more expensive.