AboutRichard Fritzler Expertise Specializing in Business and Corporate taxation. Comparing the advantages and requirements of different business entities, such as Sub-S Corporations, LLC`s, Partnerships (Both Limited and General), Doing Business as a Sole Proprietor, or Using a C-Corporation. Issues regarding K-1 distributions, 1040, schedule C, 1120, 1120s. Are you considering domiciling a Corporation in a low tax state? I can review the benefits and misinformation that exists.
Experience I have been in the business of assisting business owners in reducing their taxes and liability since 1986. The company is Owelesstax, incorporated, at www.owelesstax.com
Organizations National Small Business Owners Association. Publications Contributing author to "The Corporate Standard Newsletter".
Publications Contributing author to "The Corporate Standard Newsletter".
Question Hi Richard:
I know individuals are limited to $3000 loss from investment losses and I know day traders are not--but to qualify as a day trader you need to trade well every day. Is there a category for an investment company that could invest and trade in securities and options and take any losses [should they occur] as a write off against income from other business I'd own. IF the answer is yes, I assume it would mean forming some kind of corporate entity for the company--either a C or S corp. Any advice in this regard would be appreciated.
thanks,
Marshall
Answer The answer is no. Corporations apply losses to gains. But if you are losing more than your gaining . . . quit. Or more poetically (can't remember who said it): "If you find yourself in a hole, quit digging".
This sounds obvious and it is, but the strip mall accountants seem to miss this point. They actually encourage people to create losses as a form of deductions; this is foolhardy. But you need to know their motivation in making that recommendation.
First, deductions are not good. deductions make bad things less bad. The bad thing is that you gave up 100% of that money, the less bad part is that you didn't have to pay taxes on it too.
That's it.
Accountants will go into great detailed explanations why you should buy property so you can become a night time plumber and weekend landscaper, just so that you can shave a few bucks off your tax return.
I can go two ways with this: my first recommendation is to buy real estate only if you are confident that it is a good and positively cashflowing investment. That is true for any investment. If you are going to make money don't do it.
Second best recommendation, if after this explanation you still are scrounging for deductions, but now realize you are looking for low maintenance deductions, ones that won't require constant effort. I can offer the lowest effort deduction available. It can be any size, if you feel you need a $100,000 deduction. . . this is it. If you want to deduct $2 million dollars (That's right 2 million) this will work. It is such a little bit of effort it is incredible. In fact it is just a couple of hand written lines and your signature.
That's it a few words on a piece of paper, sign it and you can have as large of a deduction as you please.
