Should A Trader Have A C-corp Or An S-corp?

Discussion in 'Professional Trading' started by tradingcards, Sep 19, 2007.

  1. I formed a general C (corporation) earlier this year to claim my stock and options trading as a business and avoid the capital gains taxes that come along with short term trading. I am not sure if I should make it an S corp. I heard there are different tax advantages between a C and an S corp. I do not know what they are. Knowing what I am using the corporation for, should I be a C or an S corp.? What are the big differences between the tax advantages of the C and S corp? thank you
  2. Not the best tax expert but a C-corp does not mean you dont pay capital gains taxes, the C-corp will pay them out of the trading revenues. And then you will suffer double taxation when you take the money out as it will be treated as a dividend and treated as income. This is the one failing of C-corp if you want access to your money, double taxation.

    That being said, if you formed a C-corp and never spoke with a tax professional who can give you the true correct answers then you really put the cart before the horse. No matter what I or anyone else says here, you really need to sit down with an accountant and learn the effects of the different entities on your situation.