What entity to use in no personal income tax states

Discussion in 'Taxes and Accounting' started by KHL, Sep 9, 2005.

  1. KHL


    This is for all the traders who live in personal income tax free states such as Nevada, Florida, Texas, Washington, etc.

    Since there is no personal income tax, what entity you use to trade (e.g. LLC, LP, C or S corp., none, combination) and why? And do not forget to mention the state you are in.

    Cheers :cool:
  2. I don't understand your question.

    The purpose of a separate legal entity is not to avoid taxation. The main purpose is to have a separate legal existence that can be owned by a number of natural persons who have no general liability for the debts of the entity in excess of their investment.

    Also, even though there is no "personal" income tax in a jurisdiction, does not mean that there is no "corporate" income tax, or State corporate franchise fees. And, in the case of a C-corp, there is still a tax obligation to the Federal government, regardless of whether or not there is a State tax obligation.

    So, what is it that you are trying to accomplish?