topic Looking at starting daytrading - wondering if my taxes would be better under an LLC or as an individual making income from short term capital gains? in Investors & landlords

Looking at starting daytrading - wondering if my taxes would be better under an LLC or as an individual making income from short term capital gains?

bud3202 — Thu, 06 Jun 2019 10:16:13 GMT

The IRS has three classifications for stock trading. As...

Anonymous — Thu, 06 Jun 2019 10:16:15 GMT

The IRS has three classifications for stock trading. As you'll see in: https://www.irs.gov/taxtopics/tc400/tc429, only dealers can be individuals or businesses. An LLC set up under state law as a partnership or corporation can be a dealer.

There are tax advantages for traders. However, even if you satisfy the requirements to be a trader, the IRS considers a single-member LLC the same as a sole proprietor: https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-compan...

If you are going to dabble in day trading, you are an ind...

fanfare — Thu, 06 Jun 2019 10:16:16 GMT

If you are going to dabble in day trading, you are an individual investor.
To qualify as a professional trader, the IRS sets a very high bar.