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Strategies & Market Trends : IRS, Tax related strategies--Traders -- Ignore unavailable to you. Want to Upgrade?

To: WallStBum who wrote (295)	5/13/1998 9:52:00 AM
From: Colin Cody	Read Replies (1) \| Respond to of 1383

Wall, But can't you become subject to lawsuit, if say, one of your partners embezzles money from a 3rd party and then puts that money in your partnership, which you then make lots of money with in the raging bull market and then distribute out to the individual partners. What then? Of course I reaching, but I'm just thinking out loud. If one member put in $100,000 of embezzled money and the Club made a bundle, the profit would be distributed back ratably to THAT member. No other member shares beyond his own cash infusion percentage. But more to the point, if some ILLEGAL ACTIVITY goes on, I don't think one can profit by it and use the LLC shield to protect himself. Sort of like being the receiver of stolen goods. It's TOUGH LUCK if you paid for it, because the rightful owner gets the property back. I've never seen an "investment" group other than a General Partnership or Association, or Joint Venture. So I still wonder why (or if) the Club manual suggests LLC or S-Corp... Colin