The corporate management company can have the shareholder as an employee. Corporate income can be generated by both management fees and the corporate share of the LLC's income. The corporate entity can then pay hire the shareholder/employee and also set up a 401(k) plan, where the employee can defer the maximum allowable deferral, plus have the corporate entity make a matching contribution (up to the combined statutory maximum) and effectively negate a substantial portion of the corporate income. As a result, a large portion of the net investment income (ordinary dividends, qualified dividends LT & ST capital gains) can be sheltered from current taxes. For qualified dividends passed to the corporate manager, they get an 85% DRD at the corporate level also. Whatever income is left in the corporate entity can be distributed as a qualified dividends to the shareholder/employee, taxed at 15%, assuming that salaries have been sheltered in the 401(k) plan. Also, as an employer, the cotporate entity can set up a health plan, correct? All WITHOUT having to trigger a "personal holding company" designation. I presume that this is the optimal effect.
This is exactly how I had it planned in my head. I'm coming into a large inheritance and setting up the proper structure is crucial to legacy growth. My son, and my wife will be working in the corporation doing different avenues of wealth generation. Essentially, I'm a good trader and I've been trading for 7 years, however, I have a background in Real Estate and we plan on buying multi-family properties, run a property mgmt firm, run a maintenance company for rehab and repair, run a title company... The list is long. Suffice to say, this structure of having the C-Corp Management at the top and then verticals is how we are structuring it. I've been concerned about distribution from the profits on trading, so this helped tremendously, as do some of the comments here! Thank you for sharing this knowledge!!!
As someone who trades Futures, I'd love to know how to purchase things such as a vehicle or home/apartment with funds from my future trades. I trade full time so I don't have any employment history for said purchases. Any info on this would be highly appreciated!
From the last video on this a while back he said something about the income from the llc hitting a k-1 where they count 100% instead of 75% on sch d? Look back and watch that one, it's alot like this one.
If you make $50k or less. Setup LLC. See benefits. If you make +$50k/year setup SCorp. See benefits. If you use prop firms. Little benefit But check with your professional
You have 2 options: 1.) If you incorporate your brokerage account as stated in the video, you can either pay yourself a yearly salary, via the K1, or 2.) After incorporation your brokerage account, you can get business credit and checking accounts, and buy those things in your business name, and name yourself as an employee of the business.
@@Alpha-Executionno wrong. As an accountant please do not give out tax advice if you do not know the difference between an LLC and SCorp. I’m not saying this to be rude, but we have to stop giving wrong advice to people, especially on the internet. It’s not so simple just to say if you make a certain amount to start an SCorp. For example, SCorps are awful for real estate. Did you know if you have an SCorp you need to run payroll for yourself? That’s the biggest thing people don’t realize. With payroll comes FICA, SUTA, and FUTA taxes. Then software and accounting expenses.
This was a great video. Thank you so much for creating and posting it. In the future, would you consider doing a C-Corp vs S-Corp for Trading? Or do the other videos you've done on the comparisons cover it?
I appreciate you enjoying the video. Great question, to assist you further, I highly recommend you request a free 45-minute consultation to discuss this with my team so we can provide you with an answer that is unique to your situation. Visit: aba.link/khn
As a US-based future trader, we are trading using proper firms, basically funding companies. How do we qualify for the tax advantages and does the model that we are on fit the structure you just explained can we still trade with these firms and have it respected or it’s not our money could it be seen differently? All the other benefits you mentioned with C corporation is excellent. We just wanna make sure that since majority of us are trading with prop firms.
Great question, to assist you further, I highly recommend you request a free 45-minute consultation to discuss this with my team so we can provide you with an answer that is unique to your situation. Visit: aba.link/khn
Very informative. Question re: futures trading. Tax treatment for futures for individuals is 60% long-term / 40% short term. Is that lost if it is done through a LLC? (If so, the benefits of using a management company to manage a LLC that trades futures may be outweighed by the higher tax rate in the LLC.)
The way income is reported and taxed depends on the LLC's structure and its tax election. For a single-member LLC treated as a disregarded entity, trading gains and losses flow through to your personal tax return, retaining the 60/40 tax treatment. In a multi-member LLC treated as a partnership, the LLC itself does not pay taxes. Instead, gains and losses pass through to the individual members' personal returns, and each member reports their share with the 60/40 treatment still applying. If the LLC chooses to be taxed as a corporation, the 60/40 treatment may not apply, and corporate tax rules would come into play. While using an LLC provides benefits like liability protection and potential business deductions, the tax treatment of futures gains generally remains at 60/40 unless the LLC opts for corporate taxation. As a client you can work with our tax professional to fully understand the implications based on your LLC's specific structure and tax elections.
When along your trading journey does this make sense to set up. Say you don’t know yet if you will be successful enough to make it work. Do you wait for a proven track record of profitable over 3 years or is there a dollar number that would say anything over X you will start to see benefit from this structure?
I had to liquidate stocks at a $100k loss in order to close on a real estate deal, timing is everything. That real estate property is now worth over $400k more than i acquire it for. However, I still incurred that 100k loss earlier in the yr. My thought was to hopefully gain some ground later on and I did. I was lucky enough to make a $80k gain that year so my carryover loss was $20k but I also gained $400k equity somewhere else.
LLC, 1065, k-1 is a lot of work, compared to sch c and d phone call log, or just have one phone for work and one for personal use. Like business use of Vehicles.
What happens to the investment expenses, which are non-deductible on Schedule A under the 2% miscellaneous deductions, in the context of a stock partnership? What is the proper treatment for these expenses? Thank you for the excellent presentation!
Can the management entity employ the dividend exclusion rule to minimize taxes on dividends received from other companies? Thanks for the presentation. I have both real estate and a stock portfolio. I contacted your firm at the end of last year, but the process to setup the entities has stalled, my fault. I like your method.
If you make $100k in yr. 1 in the market, and then lose $100k in yr. 2, the IRS doesn’t give you a refund for the tax you paid in yr. 1, so your year 2 loss is actually $100k - (std. deduction)37% federal tax plus 0-6% state tax. Year 2 loss is $137,000. No carry forward either.
if you make $100k in profits, the STCG rate is 22%, but the C-Corp tax rate is 21%. Would you shift the profits to the C corp mgmt company to pay 1% less tax, and if so, how would you avoid double taxation when the profits are passed down to the LLC and then on your personal tax return?
in another video he mentions paying for health care as a write off and up to 59000$in 401K (it included matching i think) so that eats up most of the taxable income eventually you will b paying at least 21% of money outside of your business spending..
would the LLC doing the trading also be a c-corp to get 21% flat tax rate? also could you go over Accumulated Earnings Tax and the Personal Holding Company Tax?
I just read that Yellen says IRS is working to close loopholes that allow wealthy people to shift things that are not normally tax deductible to entities that can write them off. What say you?
Thank you for raising this question! I recommend setting up a free consultation to discuss some strategies and how they apply to your unique situation. Sign up here: aba.link/khn
Thank you so much for this video. I gotten so much clarity from watching this vid. If I wanted to do this type of setup in Wyoming for the entities I know there’s companies I can hire online that’s out there where I don’t have to travel there bc I live in Florida. Is it possible to get in contact with you instead to get things set up? I’ve always heard Delaware is also one of those states you can do the same thing as Wyoming or is there a difference between the two in why you prefer one over the other?
great video. answered a lot of my questions. I keep hearing Delaware is the place to set it up. would love to hear differences between setting up in one state versus another. thanks!
Also, I own a rental in California so the income from that is substantial. I'm new at this so my question may be trivial but would there be benefits to conducting that business through a management company? I believe one negative is a restriction on annual rental increases.
when your profit exceeds the cost of setting up 2 entities and annual fee and registered agent fee. And when you have a lot of expenses to write against profit.
@@seanfraser8456he said himself it’s best to be profitable from both day trading/ investment profits where the loss of either is offset by the gains and those gains should be able to cover estate planning fees
can you explain how it keeps running when your incompacitated? its not like the llc keeps making money, unless its long term investments. any form of business stops. and also what are the cons? you have to pay much more to do your taxes per year in a llc , and if youre small time you cant incur those. i would say without consistency its not worth setting up a llc yet but it is the way to go.
Wouldnt it be easier just to open roth IRA and deposit max amount and invest in there til you got over 25k to start trading since all the gains in there are tax free.
Why do we need 2 entities? Can I just have the management company (C-corp) hold all of the funds and do the trading themselves? Why make another LLC to partner with the management company?
i also planned on doing real estate, and auto bth as secondary businesses. like rental properties airbnb and luxury auto and sports cars etc (like toro and airbnb but into a personal company i already think i have planned on process and i have from the nae to the assets i want to start with and where,)( with this trading. business i havent done anything quitre yet its been since friday i did expidited got my ein though etc but waiting on bpapers and need to make a banjk account)
I still don’t understand why we have to set up two entities, one for expenses, and one for trading? Can we still have the same benefit of using only one LLC in the trading?
Great question, to assist you further, I highly recommend you request a free 45-minute consultation to discuss this with my team so we can provide you with an answer that is unique to your situation. Visit: aba.link/khn
Yes.... you would have to register in California as a foreign Corp/LLC, and keep paying the minimum $800 annual fee to FTB, and any additional taxes on the profits.
Great question, to assist you further, I highly recommend you request a free 45-minute consultation to discuss this with my team so we can provide you with an answer that is unique to your situation. Visit aba.link/khn
No, you can either carry back 3yrs, or carryforward to future years where there are capital gains and offset against either of those. Regarding Limitations its upto your capital gains in that year.
Love this video. I will be reaching out so you can help me establish entities. Right now, I'm trading under my name because my broker needs at least 50k to register under an LLC. Well explained. I have many articles and videos regarding trading under business. This is getting top of the list.
Great question, to assist you further, I highly recommend you request a free 45-minute consultation to discuss this with my team so we can provide you with an answer that is unique to your situation. Visit: aba.link/ly8
Thanks for asking about taxes for futures traders. I would recommend setting up a free consultation to talk about some strategies and how they apply to your unique situation. Sign up here: aba.link/khn
I. just set up my trading business out of wyoming but as a fintech, wasnt sure whatto do. i did the whole legalzoom fully serviced thing... i do have an attorney in wyoming i believe they are from the state its registered in? unliited help but havent spoke to them nor picked anyone or hoever it works yet. would love to chat...
Hmm ... so if I had a 20% C Corp & 80% me -> both own a disregarded Michigan LLC partnership ...... So if that Corp is incorporated in another state than Michigan, will it owe taxes to the state of Michigan?
Other than with some challenges/ additional steps needed for setting up US bank account, otherwise you can do it. It will take little longer time to get Tax ID's etc..
plus i want to use it for leasing a property and buying properties, the cars , ^ in said business for them seperate or in the original because its a broad possiblity ) i was about to continue to buy more for my trading like i had bought a new macbook pro andiad pro and just about to purchase new monitors near 2000$ so aboug 10,000 already on three items. but i made 10,000 yesterday morning. I will need great help. first video i saw on this luckily, so i think that was for a reason.-Adam
If you treat your trading as a business, any gains you make from buying and selling securities will generally be considered business income, not capital gains. When you elect to treat trading as a business, it typically means you are engaging in frequent trading and trying to profit from short-term price movements. Long-term capital gains are generally applicable when you hold assets for more than one year before selling. These gains are taxed at preferential rates, which are usually lower than ordinary income tax rates.
@TobyMathis thought you might do a video on taxes with regard to prop trading individuals. It probably would be viewed often and you would gain from that.
If you don't have a few hundred thousand in business capital, you won't be doing this, so settle down. Brokers require 250k - 300k to open a business trading account.
Soo you get a job, get paid and they take taxes out of your pay, then you put it in the stock market and trade with it and they tax that. how is that even right or moral.
The $25,000 rule is called the PDT rule. It refers to taking more than 3 round trip trades per day. (Opening a position and closing it is one round trip trade) It would be possible for someone with less than $25,000 in their brokerage account to take one round trip trade each day without getting shutdown.
@@sammysolis8495 I think what Toby is saying here is that it is difficult for an individual retail trader to prove their claim to be a trader. If you you trade for a prop firm, financial institution or a hedge fund, then you need to have licenses. In that case having those licenses would be proof. But retail traders are not going to have those licenses. I think what Toby is suggesting here is good. There are a multitude of problems with just trying to be a sole proprietor trader. Even if you are successful, making profitable trades is not qualified income (you can not use it as income for loan applications).
@@sammysolis8495 The PDT (pattern day trading) rule is preventing multiple trades on the same day if you have less than $25k in your account. So if you start with less than $25k you are probably going to take increased risk with each trade to get your account up to $25k as quickly as possible so that you can take multiple trades in one day. You can also find offshore brokerage companies that don’t have to enforce the PDT rule.
Toby, I did my free consultation when I saw your prior video on this same subject. The guy I consulted with was unable to answer most of my questions and said he was going to consult other attorneys in your office. I never heard back from anyone. I've since established my software company, and Im about to set up another brokage account and would really like to speak to someone that could answer my question. I reached out to you on Facebook as well and never heard back from anyone. You have sold me to work with Anderson from watching your videos, but your guys failed to close the deal. How do I go about getting answers to my questions with someone who knows? Regards Jerrod G.
If you want to learn about structuring a trading business, connect with my team for a free consultation. Visit: aba.link/khn
Toby who should I speak to open same c corp tax Wyoming llc and the rest ?
The corporate management company can have the shareholder as an employee.
Corporate income can be generated by both management fees and the corporate share of the LLC's income.
The corporate entity can then pay hire the shareholder/employee and also set up a 401(k) plan, where the employee can defer the maximum allowable deferral, plus have the corporate entity make a matching contribution (up to the combined statutory maximum) and effectively negate a substantial portion of the corporate income.
As a result, a large portion of the net investment income (ordinary dividends, qualified dividends LT & ST capital gains) can be sheltered from current taxes.
For qualified dividends passed to the corporate manager, they get an 85% DRD at the corporate level also.
Whatever income is left in the corporate entity can be distributed as a qualified dividends to the shareholder/employee, taxed at 15%, assuming that salaries have been sheltered in the 401(k) plan.
Also, as an employer, the cotporate entity can set up a health plan, correct?
All WITHOUT having to trigger a "personal holding company" designation.
I presume that this is the optimal effect.
This is exactly how I had it planned in my head. I'm coming into a large inheritance and setting up the proper structure is crucial to legacy growth. My son, and my wife will be working in the corporation doing different avenues of wealth generation. Essentially, I'm a good trader and I've been trading for 7 years, however, I have a background in Real Estate and we plan on buying multi-family properties, run a property mgmt firm, run a maintenance company for rehab and repair, run a title company... The list is long. Suffice to say, this structure of having the C-Corp Management at the top and then verticals is how we are structuring it. I've been concerned about distribution from the profits on trading, so this helped tremendously, as do some of the comments here! Thank you for sharing this knowledge!!!
Please make a video that lays out the left side of the blackboard. Deserves to be more expanded
This is a very much needed information at this time. Thank you so much for sharing.
Mahalo! I’m going to watch this a second time, so much good information.
I'm glad you found the information helpful.
hey toby thx for your good work this helps us all
Yes, thank you! I trade full time and need all the information that I need!
As someone who trades Futures, I'd love to know how to purchase things such as a vehicle or home/apartment with funds from my future trades. I trade full time so I don't have any employment history for said purchases. Any info on this would be highly appreciated!
Same here
From the last video on this a while back he said something about the income from the llc hitting a k-1 where they count 100% instead of 75% on sch d? Look back and watch that one, it's alot like this one.
If you make $50k or less. Setup LLC. See benefits. If you make +$50k/year setup SCorp. See benefits.
If you use prop firms.
Little benefit
But check with your professional
You have 2 options: 1.) If you incorporate your brokerage account as stated in the video, you can either pay yourself a yearly salary, via the K1, or 2.) After incorporation your brokerage account, you can get business credit and checking accounts, and buy those things in your business name, and name yourself as an employee of the business.
@@Alpha-Executionno wrong. As an accountant please do not give out tax advice if you do not know the difference between an LLC and SCorp. I’m not saying this to be rude, but we have to stop giving wrong advice to people, especially on the internet. It’s not so simple just to say if you make a certain amount to start an SCorp. For example, SCorps are awful for real estate. Did you know if you have an SCorp you need to run payroll for yourself? That’s the biggest thing people don’t realize. With payroll comes FICA, SUTA, and FUTA taxes. Then software and accounting expenses.
This was a great video. Thank you so much for creating and posting it. In the future, would you consider doing a C-Corp vs S-Corp for Trading? Or do the other videos you've done on the comparisons cover it?
I appreciate you enjoying the video. Great question, to assist you further, I highly recommend you request a free 45-minute consultation to discuss this with my team so we can provide you with an answer that is unique to your situation. Visit: aba.link/khn
Excellent information! I've wondered about this many times
As a US-based future trader, we are trading using proper firms, basically funding companies. How do we qualify for the tax advantages and does the model that we are on fit the structure you just explained can we still trade with these firms and have it respected or it’s not our money could it be seen differently?
All the other benefits you mentioned with C corporation is excellent. We just wanna make sure that since majority of us are trading with prop firms.
Great question, to assist you further, I highly recommend you request a free 45-minute consultation to discuss this with my team so we can provide you with an answer that is unique to your situation. Visit: aba.link/khn
@@TobyMathis I will take that offer. I’ll contact you guys very soon. Thank you, sir.
Great information to come upon! Currently own a sole LLC and need to plan for continued success. I just scheduled my 1st consult with your team.
Thank you for your support! We're excited to help you on your journey and look forward to your consultation!
Thank you for sharing this information
My first time here on your channel. So glad I came across this info. Very valuable.
Welcome to the channel! I'm glad you found the information valuable.
MY MAN TOBY,,LOVE THE VIDEOS ALWAYS ON POINT. 👍 📈 📈 📈 📈 📈
Hey, thanks a ton for the love
Thanks for being such a great teacher
Very informative. Question re: futures trading. Tax treatment for futures for individuals is 60% long-term / 40% short term. Is that lost if it is done through a LLC? (If so, the benefits of using a management company to manage a LLC that trades futures may be outweighed by the higher tax rate in the LLC.)
The way income is reported and taxed depends on the LLC's structure and its tax election. For a single-member LLC treated as a disregarded entity, trading gains and losses flow through to your personal tax return, retaining the 60/40 tax treatment. In a multi-member LLC treated as a partnership, the LLC itself does not pay taxes. Instead, gains and losses pass through to the individual members' personal returns, and each member reports their share with the 60/40 treatment still applying. If the LLC chooses to be taxed as a corporation, the 60/40 treatment may not apply, and corporate tax rules would come into play. While using an LLC provides benefits like liability protection and potential business deductions, the tax treatment of futures gains generally remains at 60/40 unless the LLC opts for corporate taxation. As a client you can work with our tax professional to fully understand the implications based on your LLC's specific structure and tax elections.
Thank You Mr. Mathis... Excellent! I've been educating myself on this topic... How Much to SetUp and Maintain This Entity Structure?
Thanks!
Connect with my team for a free consultation. Visit: aba.link/khn
When along your trading journey does this make sense to set up. Say you don’t know yet if you will be successful enough to make it work. Do you wait for a proven track record of profitable over 3 years or is there a dollar number that would say anything over X you will start to see benefit from this structure?
Born to teach! Thank you for all you do❤
Will this work for trading crypto? How about long term cap gains on crypto from years ago not yet realized? Very interested. Thank you, Toby!
I had to liquidate stocks at a $100k loss in order to close on a real estate deal, timing is everything. That real estate property is now worth over $400k more than i acquire it for. However, I still incurred that 100k loss earlier in the yr. My thought was to hopefully gain some ground later on and I did. I was lucky enough to make a $80k gain that year so my carryover loss was $20k but I also gained $400k equity somewhere else.
LLC, 1065, k-1 is a lot of work, compared to sch c and d phone call log, or just have one phone for work and one for personal use. Like business use of Vehicles.
What happens to the investment expenses, which are non-deductible on Schedule A under the 2% miscellaneous deductions, in the context of a stock partnership? What is the proper treatment for these expenses? Thank you for the excellent presentation!
Can the management entity employ the dividend exclusion rule to minimize taxes on dividends received from other companies? Thanks for the presentation. I have both real estate and a stock portfolio. I contacted your firm at the end of last year, but the process to setup the entities has stalled, my fault. I like your method.
If you make $100k in yr. 1 in the market, and then lose $100k in yr. 2, the IRS doesn’t give you a refund for the tax you paid in yr. 1, so your year 2 loss is actually $100k - (std. deduction)37% federal tax plus 0-6% state tax. Year 2 loss is $137,000. No carry forward either.
Okay, how much does the most basic structure like this cost to set up?
Hi, I would recommend meeting up with my team to discuss the best structure for your. aba.link/khn
if you make $100k in profits, the STCG rate is 22%, but the C-Corp tax rate is 21%. Would you shift the profits to the C corp mgmt company to pay 1% less tax, and if so, how would you avoid double taxation when the profits are passed down to the LLC and then on your personal tax return?
in another video he mentions paying for health care as a write off and up to 59000$in 401K (it included matching i think)
so that eats up most of the taxable income eventually you will b paying at least 21% of money outside of your business spending..
would the LLC doing the trading also be a c-corp to get 21% flat tax rate? also could you go over Accumulated Earnings Tax and the Personal Holding Company Tax?
You mentioned no one can see the owner in Wyoming. What about FINCEN?
No creditors or normal people can. FinCEN has it in its database, but it is not available to the public
Can you recommend anyone that does this according to Canadian tax law?
What about if I only trade futures?
Can I simply register as a corporation and only pay 20% on all gains???
@tobyMathis I have a firm that will pay out to a single member LLC, suggested adjustment to the structure?
What affects does this set up have with BOI now having to be filed?
THanks for sharing
Question- when is best to set this up? I’m already trading but am primarily in healthcare with student debt.
I would recommend setting up a free consultation to talk about some strategies and how they apply to your unique situation. Sign up here: aba.link/khn
I just read that Yellen says IRS is working to close loopholes that allow wealthy people to shift things that are not normally tax deductible to entities that can write them off. What say you?
Does the partnership that has the trading account need to be setup election as a mark to market with the IRS?
Thank you for raising this question! I recommend setting up a free consultation to discuss some strategies and how they apply to your unique situation. Sign up here: aba.link/khn
Yes
Thank you so much for this video. I gotten so much clarity from watching this vid. If I wanted to do this type of setup in Wyoming for the entities I know there’s companies I can hire online that’s out there where I don’t have to travel there bc I live in Florida. Is it possible to get in contact with you instead to get things set up? I’ve always heard Delaware is also one of those states you can do the same thing as Wyoming or is there a difference between the two in why you prefer one over the other?
Glad you enjoyed the video. I would recommend reaching out to my team for a free consultation aba.link/khn
great video. answered a lot of my questions. I keep hearing Delaware is the place to set it up. would love to hear differences between setting up in one state versus another. thanks!
Also if there are any benefits to doing this if 'earning' retirement income. Can the management company 'manage' retirement income?
Also, I own a rental in California so the income from that is substantial. I'm new at this so my question may be trivial but would there be benefits to conducting that business through a management company?
I believe one negative is a restriction on annual rental increases.
with a c corp mgmt there are no profits, only expenses, so there would be no double tax, is that right?
At what profit would you want to be making to set this structure up?
when your profit exceeds the cost of setting up 2 entities and annual fee and registered agent fee. And when you have a lot of expenses to write against profit.
So, this isn't good for buy and hold, where the only income are dividends?
@@seanfraser8456he said himself it’s best to be profitable from both day trading/ investment profits where the loss of either is offset by the gains and those gains should be able to cover estate planning fees
can you explain how it keeps running when your incompacitated? its not like the llc keeps making money, unless its long term investments. any form of business stops. and also
what are the cons? you have to pay much more to do your taxes per year in a llc , and if youre small time you cant incur those. i would say without consistency its not worth setting up a llc yet but it is the way to go.
I’ll make sure to contact you guys to set this up for me this year. Im a futures trader
Look forward to connecting =)
They created this exact structure for me before I even knew what I needed. It's working great. I'm a futures trader.
@@scottcampbell7944 awesome
@scottcampbell7944 do you work prop?? I do trying to figure out what will work for me
Can I create a entity as an LLC and manage or work for the LLC as a trader? and or does it have to be file as a c-corp or can have it as s-corp?
Wouldnt it be easier just to open roth IRA and deposit max amount and invest in there til you got over 25k to start trading since all the gains in there are tax free.
Why do we need 2 entities? Can I just have the management company (C-corp) hold all of the funds and do the trading themselves? Why make another LLC to partner with the management company?
If you trade inside of the c-corporation, you lose the benefit of capital gains.
Thank you😊
i also planned on doing real estate, and auto bth as secondary businesses. like rental properties airbnb and luxury auto and sports cars etc (like toro and airbnb but into a personal company i already think i have planned on process and i have from the nae to the assets i want to start with and where,)( with this trading. business i havent done anything quitre yet its been since friday i did expidited got my ein though etc but waiting on bpapers and need to make a banjk account)
How do you transfer your existing portfolio/brokerage account into this new structure without incurring any gains?
I recommend registering for a complimentary consultation with my team. We'll tailor our advice to your specific needs. Sign up here: aba.link/khn
would this work if you are a funded trader at at Prop Firm?
I recommend registering for a complimentary consultation with my team. We'll tailor our advice to your specific needs. Sign up here: aba.link/khn
Idea for another topic is: "Can you do Section 1256 for forex? or best way to do taxes for forex?"
Thank you for the suggestion. I'll definitely consider covering Section 1256 and the best way to do taxes for forex in an upcoming video.
I still don’t understand why we have to set up two entities, one for expenses, and one for trading? Can we still have the same benefit of using only one LLC in the trading?
I recommend registering for a complimentary consultation with my team. We'll tailor our advice to your specific needs. Sign up here: aba.link/khn
What is the difference if there is only ONE LLC that has the expenses and the trading?
Great question, to assist you further, I highly recommend you request a free 45-minute consultation to discuss this with my team so we can provide you with an answer that is unique to your situation. Visit: aba.link/khn
Can this be set in Wyoming if I am in California?
Yes.... you would have to register in California as a foreign Corp/LLC, and keep paying the minimum $800 annual fee to FTB, and any additional taxes on the profits.
Why Wyoming vs ny?i live in ny and already have an llc as a real estate agent
If I did a review channel on social media, would that count as a business?
Great question, to assist you further, I highly recommend you request a free 45-minute consultation to discuss this with my team so we can provide you with an answer that is unique to your situation. Visit aba.link/khn
Is an s-Corp a good as a c- corp?
I recommend registering for a complimentary consultation with my team. We'll tailor our advice to your specific needs. Sign up here: aba.link/khn
How would you handle having a w-2 job and trading for a funding company under a 1099 ?
I recommend registering for a complimentary consultation with my team. We'll tailor our advice to your specific needs. Sign up here: aba.link/khn
You're still able to deduct capital gain loses (under the C-Corp)? limitations to capital gain losses annually within this structure?
No, you can either carry back 3yrs, or carryforward to future years where there are capital gains and offset against either of those. Regarding Limitations its upto your capital gains in that year.
thank you
Love this video. I will be reaching out so you can help me establish entities. Right now, I'm trading under my name because my broker needs at least 50k to register under an LLC. Well explained. I have many articles and videos regarding trading under business. This is getting top of the list.
I'm glad you found the video helpful. Feel free to reach out whenever you're ready to establish your entities.
Good stuff ❤
Thanks
when you do the entity and mgmt company, can the trader themself be the mgmt company or does it require a different person?
Great question, to assist you further, I highly recommend you request a free 45-minute consultation to discuss this with my team so we can provide you with an answer that is unique to your situation. Visit: aba.link/ly8
@@TobyMathis this consultant is geared towards sales. I want to ask questions. Is that ok there too?
Do futures traders pay the 15.3% Medicare/ss tax + the 60/40 tax?
Thanks for asking about taxes for futures traders. I would recommend setting up a free consultation to talk about some strategies and how they apply to your unique situation. Sign up here: aba.link/khn
CLASSIC STOCK BANK ACCOUNT VIDEO ON MICROMANAGING FUNDS INTO SUCCESS
THANXU TOBY
How to go about it if you are a funded trader and being paid from the prop firm as an independent contractor?
I would recommend setting up a free consultation to talk about some strategies and how they apply to your unique situation. Sign up here: aba.link/khn
I. just set up my trading business out of wyoming but as a fintech, wasnt sure whatto do. i did the whole legalzoom fully serviced thing... i do have an attorney in wyoming i believe they are from the state its registered in? unliited help but havent spoke to them nor picked anyone or hoever it works yet. would love to chat...
Hmm ... so if I had a 20% C Corp & 80% me -> both own a disregarded Michigan LLC partnership ...... So if that Corp is incorporated in another state than Michigan, will it owe taxes to the state of Michigan?
without going into the details, its a Yes ...more likely than not you will owe to your home state.
as an entity with mgmt co for a trading business, would the trader still need to elect MTM?
Yes, Absolutely
Who are the owners of the LLC/C-Corp? Do I own that 100%? In addition to the 80% ownership of the Stock LLC
It can be owned by anyone, but yes, if it is you then you will keep all gains
Are non US residents (other nationality) allowed to set this up in the US?
Other than with some challenges/ additional steps needed for setting up US bank account, otherwise you can do it. It will take little longer time to get Tax ID's etc..
plus i want to use it for leasing a property and buying properties, the cars , ^ in said business for them seperate or in the original because its a broad possiblity ) i was about to continue to buy more for my trading like i had bought a new macbook pro andiad pro and just about to purchase new monitors near 2000$ so aboug 10,000 already on three items. but i made 10,000 yesterday morning. I will need great help. first video i saw on this luckily, so i think that was for a reason.-Adam
Can I do this if I still have W2 income?
I recommend registering for a complimentary consultation with my team. We'll tailor our advice to your specific needs. Sign up here: aba.link/khn
Like to know more about the family management company
Connect with my team and schedule your free consultation. aba.link/khn
Can i still claim long term capital gains after setup trading as business?
If you treat your trading as a business, any gains you make from buying and selling securities will generally be considered business income, not capital gains. When you elect to treat trading as a business, it typically means you are engaging in frequent trading and trying to profit from short-term price movements. Long-term capital gains are generally applicable when you hold assets for more than one year before selling. These gains are taxed at preferential rates, which are usually lower than ordinary income tax rates.
How can I hire you to structure my entire plan)
Sign up for your free consultation here: aba.link/khn
Do you have a Prop Trader tax structure?
Schedule a complimentary consultation with my team today. aba.link/khn
@TobyMathis thought you might do a video on taxes with regard to prop trading individuals. It probably would be viewed often and you would gain from that.
If you don't have a few hundred thousand in business capital, you won't be doing this, so settle down. Brokers require 250k - 300k to open a business trading account.
What about the Democratic corporation transparency laws 🤔
Puerto Rico is looking thicc
Considering 800m trades per year. WHO-TF does that!?!?!?! That is NOT a trader. That is a gambler.
Soo you get a job, get paid and they take taxes out of your pay, then you put it in the stock market and trade with it and they tax that. how is that even right or moral.
ThumbItUp &LeaveAnyComment 4AIgozAll
I thought you were supposed to have 25k or more to trade
The $25,000 rule is called the PDT rule. It refers to taking more than 3 round trip trades per day. (Opening a position and closing it is one round trip trade) It would be possible for someone with less than $25,000 in their brokerage account to take one round trip trade each day without getting shutdown.
@@mixingjd right so in order to trade daily, you need to have 25k in account to then be considered a day trader and possibly use it as a business ?
@@sammysolis8495 I think what Toby is saying here is that it is difficult for an individual retail trader to prove their claim to be a trader. If you you trade for a prop firm, financial institution or a hedge fund, then you need to have licenses. In that case having those licenses would be proof. But retail traders are not going to have those licenses. I think what Toby is suggesting here is good. There are a multitude of problems with just trying to be a sole proprietor trader. Even if you are successful, making profitable trades is not qualified income (you can not use it as income for loan applications).
@@sammysolis8495 The PDT (pattern day trading) rule is preventing multiple trades on the same day if you have less than $25k in your account. So if you start with less than $25k you are probably going to take increased risk with each trade to get your account up to $25k as quickly as possible so that you can take multiple trades in one day. You can also find offshore brokerage companies that don’t have to enforce the PDT rule.
Decline margin account and use a cash account and you can trade everyday. If you're under 25k
Toby, I did my free consultation when I saw your prior video on this same subject. The guy I consulted with was unable to answer most of my questions and said he was going to consult other attorneys in your office. I never heard back from anyone. I've since established my software company, and Im about to set up another brokage account and would really like to speak to someone that could answer my question. I reached out to you on Facebook as well and never heard back from anyone. You have sold me to work with Anderson from watching your videos, but your guys failed to close the deal. How do I go about getting answers to my questions with someone who knows?
Regards
Jerrod G.
This is a very much needed information at this time. Thank you so much for sharing.
Glad it was helpful =)