There ARE tax (and other) benefits to using an entity. Also, once again, it's complete BS to say 20 to 1 is barely enough BP to make money...as a matter of fact the vast majority of successful traders I know don't go beyond 20 to 1, even though they are able to.
I agree with you about possible tax benefits for retail traders, but I have not seen any instances where it makes any sense when trading with a prop firm. An "entity" owner has to personally guarantee everything, including losses in excess of their deposit amount...individuals don't. Taxed on "triple net" with No FICA is pretty good as well. Potential for double taxation, etc. The possible tax deferred stuff and health insurance (potential) write off is not enough to offset IMO. Regarding capital, if you have enough then fine...I was simply saying that for the average PDT ($25K) that $500K is not even enough to participate in many opening only orders, pairs or mergers...that's all.....if you have a couple hundred g's - then 20:1 would probably be fine. All the best, Don
Question for JohnTack: have you started your LLC? I wanted to ask you other questions by email but it is not in your profile. Thank you.