K1s and taxes...

Discussion in 'Taxes and Accounting' started by jpomerenke, Dec 9, 2003.

  1. When i recieve a K1 at the end of the year, am i taxed on gross gains or net gains after comissions and percentage that goes to firm (i recieve 90%) payout...
    Thanks in advanced!!
  2. gimp570


    you get taxed on everything that they pay you
  3. The short answer is that you get taxed on the net, i.e., what they pay you. Enter all the figures from the K-1 in the blocks on your individual tax forms where the K-1 directs you to enter, and after it is all said and done, the end result is that you will be taxed on the net income that flows through to you.
  4. Ok then....if a guy was to save a "set percentage: of each payout he took what would be the right percentage on average? 25,30,35%?
  5. gimp570


    I would get an accountant....If he/she tells you one thing that you don't know it will save you thousands.....
  6. I know nobody on this board would ever finish negative for the year... but I have a "friend" who may...

    Can my "friend" deduct the full amount of any loses?
  7. Hi Durango Kid:

    The general rule is that net capital losses (after offsetting against your net capital gains) are limited for a noncorporate taxpayer to a $3,000 per year offset against other income. The remainder of the capital loss is carried forward to the next taxable year.

    There is an exception if the taxpayer has made the mark-to-market election under Sec. 475. If that election has been made, then the taxpayer no longer has capital gain/loss; rather the income is ordinary gain/loss. In that event, the $3k capital loss limitation rule no longer applies because there is no "capital" loss.

    There are some other arcane rules that theoretically come into play that can operate to restrict deductibility: (a) the "at risk" rules of Sec. 465; and (b) the "passive activity loss" rules of Sec. 469. However, these two rules rarely create a problem for traders since most (if not all) traders are indeed "at risk" and are not passive.
  8. taxes suck:eek:
  9. tdoc


    When do most prop firms send out K-1s for the previous tax year? I'm still waitng on mine.
  10. Aaron


    According to tax regulations, K-1s are supposed to be sent out by the end of February, I believe. Not sure what happens (or what you can do) if a firm doesn't comply, though.
    #10     Mar 11, 2004