In the USA, it depends how the company characterizes those "unrealized profits" that are re-invested. That characterization determines how you will treat it for tax purposes. There may even be different characterizations year to year. You saying it is unrealized profit means nothing... the company determines the characterization, not you. Without details, a typical and simple DRIP example... Annually, you get a 1099-DIV even though you do not receive cash, but the dividends are reinvested. The 1099-DIV is reportable in that year. Additionally, it is your responsibility to include the re-invested amount in your cost-basis when the shares are eventually disposed. There are many unknowns in this typical and simple example. Placing automatic reinvesting vehicles inside retirement accounts is a valid tax strategy.
Phantom income. Taxable covered call writing can create it and 1256 contract in taxable accounts - the part of 1256 most forget. Almost any MTM election could create it. Pass-throughs do just that - they pass the gain onto the investor. Part of the reason the term tax efficient investing was coined.
No idea, you should contact an accountant that has experience with this matter and ask them, that's the only way to get a guaranteed correct answer.
I think I should research the taxing of hedge funds and their clients... Also interesting text: https://www.investopedia.com/articles/trading/09/incorporate-active-trading.asp " ... If you are successful as an independent day trader, it can create significant tax liabilities for you. Individuals who want to actively participate in the stock market have several options: they can trade as individuals or sole proprietors, qualify for trader status, or trade through a business entity such as an LLC. For the active trader, creating a legal trading business will often provide the best tax treatment and asset protection. ... "
Trading through an entity, by itself, is NOT qualification for Trader Tax Status. The two things, an entity and TTS are exclusive of the other. Entities can qualify for TTS just like an individual can qualify for TTS. Just saying. In either case, TTS is a requirement to unlock possible tax advantages. An entity is not a requirement. I trade through a Sub-S, for years.
My habit is to be well prepared when meeting such people, so to be able to understand them and be at the "same level"...
That's an interesting scenario you've laid out. When I was exploring investment options, I stumbled upon the concept of an agreement startup. It's a game-changer for long-term investments like yours. I remember thinking how smart it was to structure investments in a way that minimizes tax implications until the end. It's like planting a seed and watching it grow tax-efficiently until harvest time.
Sorry...Not buying it. You have a problem keeping $25,000. (PDT rule) in an account. You also talked about margin... https://www.elitetrader.com/et/threads/the-injustice-in-trading-in-the-us-a-manifesto.378406/ I don't think you need a CPA...Much less Turbo Tax. If you really want to do something creative...Fund a Roth IRA to the max for 2023 and 2024. Play with those funds...If you have them.