thats the question... i was looking for an answer. I have losses in the C corp because of expenses. if I trade the gains from the sales would offset the losses so I would have about 55,000 in "free" profits but was worried about anything over that.
Good luck on finding a competent CPA. They are few and far between. Competent meaning they take advantage of all the laws and tricks to save you taxes. For myself after getting so so advice with a previous corp. I learned (am learning) all I could about the benefits of sub S , C , and individual for my situation. Now I'm trying to find an accountant with the same mindset and who dosn't mind legally beating the IRS.
Try this site. THey are CPA's that specialize in traders and trading accounting. http://www.greencompany.com/
I hear you loud and clear. Most CPA's seem to be overwelmed by the day to day. if we keep the current Tax code etc. the day will be coming when CPA's will need to specialize within an industry. I have yet to find one thats worth the 500 an hour that that seem to charge...ergo I am doing my own corp return this year with TURBO tax for business.
i dont think 99% of professionals would recommend trding under a straight C corp. Its a horrible idea. three things come to mind. 1) you cant deduct losses 2)you could be subject to personal holding tax. i guess only two things come to mind. trade in a pass throgh entity where it belongs or as an individual but thats where everyone else's recommendations are wise to consult YOUR tax accountant. Pat, CPA, CMA
And a lot of CPA's are afraid to challange the IRS, they will take the easy way out and this will cost you. I had one like that who almost cost me thousands and thousands of dollars. Then I found an accountant(not a CPA) who had some balls and knew the ropes about how the irs works and how to use all of their rules and laws to my advantage. His speciality is getting people out of trouble. As good as he is in dealing with the irs he gave me the wrong advise about how to set up my construction business corp several years ago. So now I have to set another one up, hopefully the right way this time.
What is the business purpose (SIC code) of your C corp? ... the IRS could make an argument that it is/was an unlawful tax shelter ... especially if it has no sales, has paid no payroll, and can not demonstrate business activity to justify the expenses. Also, on the car owned by the C corp ... IRS could go after the "personal usage" percentage as income. If it does have a true business purpose, then I hope it is related to trading, if not ... dangerous. The IRS is armed with recent new federal laws targeting ESOPs and other structures that were, by letter of the tax law, legal. The new law allows them to ask, "... what business purpose does this structure serve?". If the only answer is: "... it lowers our IRS tax burdon" - trouble. For $55k you might get lucky ... Good luck
the C corp was an insurance agency and i sold the renewals and kept the assets cash, property, and a car. I have been helping the people i sold it to but they don't pay me a salary just paying off on the buy sell. The assets are just sitting there so I figured i would trade with them as i have been doing it on the side for many years and have learned my lessons. And the property owned by the C corp requires maintenance its a lake with 40 acres so I drive there with the car to mow and dredge and the like. So I continue to take deductions for car and so forth. None of my CPA's have ever said I couldn't.
any competent cpa who specilazes in trader taxes will tell you don't mingle your trading business with any other business inside a corp
The car is deductable for the portion used for business (rarely 100% unless you have more cars then drivers in your family). Even if the company bought it 100% ... you would still have to show 100% business use in an audit. Lets try an not think about the A word. ... but overall, I see your predicament The tax loss carryforwards inside the C corp will eventually neutralize some of the capital gain when you liguidate the corp (sell the property, the car, etc... to ?). But it would be nice to use them now to offset short term cap gains from trading. The IRS won't even let you offset trading gains with real estate loss carryforwards or K-1 loss carryforwards on your 1040. They don't take kindly to that attempted mixing - like hedge funds, they tax the "high water mark" in each area.