A.I.M. Users Bulletin Board

[Toofuzzy]

Hi Hookslide5

>>> One of them was that if a person took his trading "hobby" and incorporated to make his hobby a "business" he would enjoy all of the tax benefits of operating a business. There were MANY. <<<

I am a tax preparer so I have some incite here....... JUST SAY NO!

FIRST OFF ..... forget the daytrading / profesional trader to claim expenses

THE LESS YOU TRADE THE BETTER OFF YOU WILL BE and cheaper also!

SECOND It is better to trade and own as much as you can in a ROTH ira FIRST, secondly in a TRADITIONAL ira SO CONTRIBUTE AS MUCH AS YOU CAN AS YOU ARE ALLOWED. When you retire ROLL OVER YOUR RETIREMENT ACCOUNT TO A TRADITIONAL IRA so you have more control and options.

THIRD: If you incoporate and own YOUR NON tax sheltered assets within a coporation you will have another return to prepare and pay to be prepared. Any income you leave in the corporation is taxed at a fairly high rate. If you take some money out to spend you will have to pay tax on it again. In other words you buy stock in a company and they make $1000 that they pay $500 in tax on. They then pay your company a $500 dividend. YOUR company then pays $250 tax. YOUR company then pays you $250 on which you will then need to pay tax. Does any of this make any sense to you?

I would be interested to know all the substantial tax benifits to investing thru a corporation and you can e-mail me privately. Most of the expenses are probably for things you don't need any way.

So your corporation rents a room of your house..... are you going to claim that income on your individual return ......what good does that do other than make your recordkeeping more complicated and when you sell your house you need to recapture some of the depreciation......Ya just don't want to know about it!

How about all the investment magazines and books, software yada yada yada...They are expenses you shouldn't have anyway, it's all financial porn, and it is taking time from doing something you enjoy as opposed to turning investing into a job!

I should take my own advise and go out hiking
Toofuzzy