I'm wondering if this is the year I consider alternatives to trading as "Joe, retail trader". I'm based in the US and interested in suggestions that would protect my personal wealth from business losses (LLC, etc.) as well as those that might protect my business from personal losses (large medical expenses, etc.), if any such entities exist. References are welcome. Thanks in advance.
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Does anyone trade through an LLC, or other entity?
- Thread starter JoeA
- Start date
I haven't made this decision yet, but have looked into it. I too, have wondered about this and have yet to find a reasonable answer to include the hassle of setting up and reporting through an S-Corp. There are two types of protections you can have: legal and tax. An LLC will give you some legal separation of finances, however, I would really research what those actually are and how well they would hold up should someone come after you. It does provide protection, but it's not as complete as some believe, and it can be pierced fairly easily if a large enough legal team decides to come after you. Still, an LLC is a very standard and well-practiced form of providing some protection.
For taxes, the LLC won't give you any protection, and you'd have to form an S-Corp, which has its own set of pain points.
Anyway, I'm sure you're aware of all of that, however, I wanted to share my story of seeking answers with local accountants in rolling my trading into my company and setting up an S-Corp.
My accountant asked why I'd ever want to do that since the long-term capital gains tax is so beneficial. I replied that this account does not have long-term gains and trades options. His response that was that nobody makes money over the long run buying options. "If nobody makes money buying options, who do you think is selling them?"
So, now I need a new accountant.
For taxes, the LLC won't give you any protection, and you'd have to form an S-Corp, which has its own set of pain points.
Anyway, I'm sure you're aware of all of that, however, I wanted to share my story of seeking answers with local accountants in rolling my trading into my company and setting up an S-Corp.
My accountant asked why I'd ever want to do that since the long-term capital gains tax is so beneficial. I replied that this account does not have long-term gains and trades options. His response that was that nobody makes money over the long run buying options. "If nobody makes money buying options, who do you think is selling them?"
So, now I need a new accountant.
Duane Glick
New member
Yes, I have through an LLC. You just trade as you usually would only with some LLC protection and you have to do some extra work at tax time but really no big deal. You may wish to check if a Trust or an LLC would be best for your needs.
Just keep in mind that most brokers will then treat you as a professional trader. That comes with monthly data fees and those can add up depending on what you are trading.I'm wondering if this is the year I consider alternatives to trading as "Joe, retail trader". I'm based in the US and interested in suggestions that would protect my personal wealth from business losses (LLC, etc.) as well as those that might protect my business from personal losses (large medical expenses, etc.), if any such entities exist. References are welcome. Thanks in advance.