Attractiveness of S Corporations After 2017
By D. LARRY CRUMBLEY and JAMES R. HASSELBACK
Authors based below content on Robert A. Green’s blog posts referenced in footnote 13.
“There are suggestions that trader tax status (TTS) should consider an S corporation for business expenses, and a section 475 election on securities for exemption from the wash sale losses and ordinary loss treatment (tax loss insurance). A TTS S corporation allows employee benefit plan deductions (for example, health insurance and high-deductible retirement plans). The new law is unclear regarding whether section 475(f) 12 income is QBI or a specified service activity. TTS business-related capital gains probably will not be included in QBI.”13
12 - A section 475(f) election (mark-to-market election) allows a trader to treat gains and losses from the sales of securities as ordinary gains and losses (except for securities held for investment).
13 - Robert A. Green, “How Traders Can Get the 20% QBI Deduction Under New Law,” Forbes, Jan. 12, 2018; and Green, “Traders Should Be Entitled to the Pass-Through Tax Deduction,” Forbes, Dec. 12, 2017.