AboutIvan Roth Expertise Federal and State Income taxes I do tax returns for partnerships and C corporations I am well versed with State Franchise taxes for CA, CT, FL,NY,TN,TX.
Experience Eight years as tax manger for a real estate company
Expert: Ivan Roth Date: 8/23/2008 Subject: LP with Corporate General Partner
Question Hello! I have organized a Limited Partnership dealing in commodity/futures trading of which the sole general partner is a corporation who’s sole owner is myself. I charge an incentive fee of 20% of all trading profits. This is the only income of the corporate general partner. Can I elect “S-corp” status and have the monies flow directly to me as the sole owner or must the general partner be classified a “C-corp” due to the fact all income is passive trading profit? If it must be a C-corp, then can I pay myself the monies thus showing no corporate profit at year end (and avoiding double taxation)? If I do pay myself the wages, must I go through paying both the employee and employer sides of social security, medicare, etc., or is there a simpler self-employement tax I can complete? Thank you for your help!
Answer Don why not trade as an individual and eliminate the complications? by the way trading profits are not subject to the self employment tax but salaries and management fees are. If you need liability protection you can elect sub S status for next year provided you file the election before March 15
