LLC Brokerage Account

Could people discuss the benefits and drawbacks of opening a stock brokerage account as an LLC?

Wouldn't personal funds provided to the LLC for trading be tax deductible business expenses? Wouldn't all retained earnings be tax free until distributed to member(s)? So one could essentially defer taxes until a later date and reduce personal income tax at the same time?

Thanks

 

sure, but you reduce personal income too.

 

Why would it decrease personal income?

 

I think if you own 50% of an llc, 50% of the LLC's profits are your profits and therefore you pay taxes on those profits.

 

why? those funds are still your money and you can take them back from LLC at any time...
i'm no tax expert,but i do have an llc for trading.the only advantage i see is ability to deduct certain expenses.the ones that are misc. expenses for individuals and subject for 2% floor.
that's about it. maybe some "asset protection" bs.
i did not see how you cab reduce your personal tax liabilities, using LLC
maybe...maybe.. if you put in this LLC bunch of poor relatives,who is in lower tax brackets than you are. this may save you few $

 

1.Bob1: Could you explain? Thanks.

2. All: How about effect of wash sale rule?

 

you know...usual expences..PC's,data,soft,legal expences,etc..

http://www.irs.gov/publications/p529/ar02.html

wash sale applies, unless you elect M2M and trader stattus (which also may lead to audit or self employed taxes)

http://www.traderstatus.com/tradingentity.htm

 

Likewise, I'm not tax expert either. I suppose you'd only be able to deduct commissions and possibly any losses that are realized.

I think the benefits would arise from being able to defer taxes on gains by keeping them as retained earnings within the LLC. So if one wanted to retire in 10 or 20 years, you would have a lower personal income and it would then be better to pass on the gains.

 

True. But say you owned 100%. If you didn't want to accept the profits for a given year, you can defer them for a later date that may be more beneficial.

 

Does it mean that by deferring the profit to the later date and instead of paying taxes you may reinvest that portion and make more profit, assuming you goanna make money trading the "tax portion money"?