Taxes, K1, LLC

Discussion in 'Taxes and Accounting' started by ManhattanTrader, Apr 14, 2004.

  1. Hello everyone,

    does anyone know if the following scenario would be feasible? thanks

    1) proprietary trader receiving a K1 makes $150K a year
    2) he opens up an LLC with let's say 4 members(he's not a member nor a manager of the LLC). The LLC functions as an advisor to the trader. it provides trading advice, any proprietary programs, etc
    3) the LLC gets paid a % of the profits. let's say $100K which is an expense to the trader
    4) trader pays taxes on $50K while the remaining $100K in profits of the LLC is split among the 4 members.

    would this be feasible?
  2. any idea? anyone?