Entity & Benefits Plan Tax-Advantaged Solutions 2016 (Recording)
Entities save traders significant taxes.
May 17, 2016 at 4:15 pm EST
Join entity tax expert Robert A. Green CPA as he explains the following:
- Employee-benefit plan deductions: Traders who qualify for trader tax status (TTS) unlock health insurance and retirement plan deductions using an S-Corp trading company or C-Corp management company. Individual retail traders don’t have self-employment income so they cannot have employee-benefit plan deductions. See examples of saving $7,000 to over $16,000 in taxes.
- Tax loss insurance: Traders in securities with TTS benefit from a Section 475 election: It exempts them from wash sale loss adjustments and a capital loss limitation. It’s better to ring-fence Section 475 trades within an entity, segregating them from investments in individual taxable and IRA accounts. New entities may elect Section 475 within 75 days of inception.
- Best entities: Learn the best choice of entity for different situations. An S-Corp is best for maximizing employee-benefit deductions; otherwise, a partnership tax return works well. A C-Corp is inappropriate as a trading vehicle, but okay as a management company. In some cases, having a trading company and a management company is helpful.
- Best retirement plans: Learn the basics on Solo 401(k) defined contribution plans and more powerful defined benefit plans.
- Timing: Mid-year is an excellent time to form a trading entity. It breaks the chain on wash sales in your individual taxable accounts and there’s plenty of time to maximize employee-benefit plan deductions for the entire year.
Our live event is complimentary and we plan to offer a complimentary recording.
Related blog posts:
Active Traders Should Consider An Entity For Tax Savings
Safeguard Use Of Section 475 By Trading In An Entity