What are the benefits of starting a trading business vs just trading?

Discussion in 'Professional Trading' started by RGLD, Dec 20, 2016.

  1. RGLD

    RGLD

    Short term cap gains are taxed as ordinary income. I am already filling out a 10-99 to write off expenses.

    So I even start an LLC or LLP or Partnership? Are the benefits really there?
     
  2. MattZ

    MattZ Sponsor

    I highly suggest talking to an account that works with self-directed traders who do it as a profession. This would give you an insight how gains/losses are treated and expenses around that LLC.
     
    comagnum likes this.
  3. GreenTraderTax, who is/was an ET sponsor, has lots of good info on his site and feed.
     
    MoreLeverage, dealmaker and MattZ like this.
  4. Deductible health insurance, better retirement plan options, you can "pay yourself" a stable income and qualify for income-based things like mortgages or HELOCs after a few years. Business expenses I think are the same either way, but not 100% sure.

    Personally, I'd focus on the trading. If that's going well, this stuff is small money compared to expanding or improving your trading.
     
    Overnight likes this.