i know there has been plenty of talk about setting up a trading entity, or company, for tax benefits, and what i was wondering was about how much does that cost. including the paperwork and all the filing fees. if anyone has done it, and knows, that would be great. also, if someone would give me a brief rundown of the different types: s corp, c corp, llc, etc...
If you are simply trading for yourself, there is no reason to set up a corporate entity. You can gain nearly all the benefits with none of the hassle by simply filing as a "Trader in Securities". Go to http://www.greencompany.com and you'll find much more information related to trader tax issues.
Did you see the Tax Shelter scam on 60 minutes on Sunday (10.19.03) ? Guy sells his company for $50 million (his share), has a tax liability of around $13 million. His "advisors" (those damn accountants), who brokered the deal, and Deutche bank, and his legal firm got him in a real mess. They claimed they had some "really complicated tax strategy" that he couldn't possibly understand. (Actually, is was very simple....the equivalent of buying $50 Million long, and Selling $50 Million short of the same securities ( a neutral position), and then claiming only the loss. For this great feat, they charged him $7Million ....in Fees alone (for doing something as stupid as that). Well the IRS of course disallowed it, and now he owes the whole $13 million, plus millions in fines and penalties (and has been arrested as well). This guy will be lucky to have any money left after legal fees. When asked why the IRs doesn't go after the CPA's, banks, and lawyers...the IRS guy says: Well, we simply cannot, by law, go after them. He signed his returns and he is fully responsible. I just thought this would point out why we should know who were doing business with, and that "when something looks too good to be true, it usually is"..... Don (Just to be sure ....to all the other readers, this is not intended to relate to Mr. Green or his business.... I just know he'd appreciate the situation).
if I were you I would check out tradersaccounting.com They are having a tax chat on Tuesday. The major advantage to organizing your trading in an entity is for the tax breaks. The web site I mentioned will give you more information.
Of course they cannot go after the banks for who are lobbying behind the law and who are organising what has now become a gigantic hostage of America's debt by the criminals of the planet: http://www.fromthewilderness.com/free/economy/053101_banks.html Wonder what will happen when these criminals will have some good idea behind their heads about what they can do with such trillions they control by owning Government and Corporate America thanks to these same banks ?
http://jesselivermore.com/jlm_authorbio.html Released in 2001 "FALSE WITNESS" Released on August, 2001. False Witness is fiction based on true events. In some cases the names have been changed to protect the guilty. In South Florida anything is possible. It is the end of the criminal funnel, where sooner or later all the major crimes and criminals wind up, basking in the sun, in the Southern end of the great state of Florida. The allure of easy money, endless sunshine, long white-sand beaches that snake the coast for miles, bikini clad women and windsurfing tan men. In this story the FAA and the DEA raid a stolen aircraft chop-shop. They are surprised to learn it is a rogue U.S. Customs operation. They are also unaware that the illegal secret operation is sanctioned from the highest levels of U.S. political power. One man decides to defy them and that's when the action starts. The story includes a new subject, the theft and re-selling of small aircraft, which in reality is a major business. The story takes us from the secret sweaty dens of iniquity in South Florida, to the mysterious Great Swamp-The Everglades, to a hot nightclub in Little Havana, and finally to the island of Cuba, where we learn that Fidel and his brother Raul are up to their ears in all forms of crime and contraband. Cuba is the new official 'Criminal Free Zone', a high tech free-trade illegal global marketplace, designed to accommodate the new breed of global criminal. A tropical home for world wide desperadoes, international criminals, who need a global 'Free Trade Zone' an open marketplace facility for their criminal enterprises. This includes: storage and repair for stolen aircraft, arms running, drug warehouses, the sale of stolen advanced computer contraband and modern hotels and pleasure palaces for the new global criminals to meet and conspire, with no threat from the long arm of law enforcement. One man is thrust into this world through no fault of his own. He is crossed and double-crossed by the U.S. Government until he has to take matters into his own hands, and that's where the action spirals, as he falls deeper and deeper into a complicated web of deceit. This book is the basis for the headlines yet to come as the world is about to witness its first glimpse at how "global gangsters" and crooked men and women of great international political power really work.
Want another example of "good" law ? Patriot Act : it obliges the brokers to declare trading account if they don't do so there is a fee (oh great) ... but limited to 1 million dollar hahaha that means all small account of every citizens will be systematically declared whereas the criminal account which are most probably more than several hundreds of million of dollars will be probably hidden !
That's a great question, I'd like to know that too, since I'm non-US (Australian) and thinking about this. Scientist.
Scientist, I think from memory you're from WA, I'm over here in Melbourne. I was thinking of setting up a US company to avoid the (47% + 1.5%) 48.5% tax on income above 62,500. From an old form i1120 (tax return for corporation) on my hard drive, the marginal tax rates up to $75k are 15% and 25%, and thereafter 34% to 39%. An Aussie company (with tax @ 30%) will become cheaper with income of $186,111, however I think it would be liable for US tax because of "trade or business in the US". I found this link http://www.bizfilings.com/international/index.html which suggests that a non-citizen, non-resident can set up a US corporation, although I was hoping someone on the board can confirm this, and maybe provide a link that explains who can and can't be a director. The tax savings by being taxed as a US company (instead as an individual earning more than $62,500) are about $21k for the first $75k of income, then 10% to 14% of income after that. However there are set-up costs and ongoing costs that should be factored in.