LLC and Taxes

Discussion in 'Taxes and Accounting' started by Engine99, Jan 1, 2008.

  1. What's wrong with this assumption.

    You start a single owner LLC (investment LLC) in 2008.
    You do an owner contribution of e.g. 20k.
    You open a trading account for the LLC and trade.
    You blow 10k within 2 month
    You close the LLC still in 2008.

    Income/Losses are passed through to your personal tax return.

    Can you deduct the 10k losses of your LLC contribution immediately (2008 tax return), and therefore avoid the 3k/year limitation you'd have as an individual investor?

    If not, why not?
    Is there any place you can find more info about this?

  2. Call H&R Block.
  3. Ha, those guys are good. I was at a prop daytrading firm in 02 brought over my K-1, he insisted that I show my trade log of all transactions. I said u mean all 2 billion trades?

  4. You can if you have capital gains to offset the 10k losses against. Otherwise, u are limited to 3k off ordinary income.

    McGreedy, CPA 1989-1994

  5. jd7419


    Mark to market election allows you to go over $3000 I believe. Irs rules on daytraders discusses this.
  6. ET985


  7. That assumes all your income is from trading. ie if you're into real estate and/or have a salary, you can't mark to market.

  8. I assume this is a sarcasm. They have like 20 hours training. They know jack sh1t about tax. They were taught how to use their program to do tax. That's about it. I know, I was there before.
  9. Best advice is to ask some friends for a good tax accountant or someone they trust that does taxes.

    There are many little shops that have VERY GOOD people doing taxes. I use a little independant tax preparer company that has two old, ex-IRS agents doing taxes. Believe me, with what they charge and all the extra deductions I've gotten through the years from them, it's worth paying a little more for the service.

    I used to do it all myself, but it ain't worth the hassle.
    #10     Jan 3, 2008