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Strategies & Market Trends : LastShadow's Position Trading -- Ignore unavailable to you. Want to Upgrade?

To: Susan Saline who wrote (13274)	4/24/1999 6:58:00 PM
From: tom pope	Respond to of 43080

Thanks, Sue that is very interesting. Before I meet my guy I will collect every last cent of trading related expenses. It will make a difference.

To: Susan Saline who wrote (13274)	4/24/1999 10:40:00 PM
From: TonyM	Read Replies (1) \| Respond to of 43080

Hi Sue, Tom, I'm no expert, but I am currently reading up on small business taxes for a project I am working on with my brother, (yes Silvio and Guido) and for my wife who is about to hire some people for her therapy practice. You can consider your activity a business as long as you are doing it for profit motive, and te IRS actually has nine guidelines to determine profit motive. Each case can be evaluated on its own merits, so information that does not fit into these categories can still be brought to the table for the final determination. The factors are: 1) The manner in which the taxpayer carries on the activity (The more professionally and "business"-like the better.) 2) The expertise of the taxpayer or his advisors 3) The time and effort expended by the taxpayers 4) The expectation that the assets used in the activity will appreciate in value 5) The success of the taxpayer in carrying on the other activities. (People with a history of business success are given the benefit of the doubt that they will be able to turn a profit eventually.) 6) The taxpayers history of income or losses with respect to that activity 7) The amount of occasional profits, if any 8) The financial status of the taxpayer 9) Elements of personal pleasure or recreation. The three out of five year rule of thumb is for the IRS to presume that the activity is for business, but not a requirement for the activity to be a business. (Being a lousy business person does not set you up for tax penalties, though the way we are going it will probably qualify you for some sort of government support.) Treasury Reg 1.183-2 covers the distinction between business and hobbies. ( The book I got this from is J.K. Lasser's Taxes made easy for your home based business, by Gary Carter.) I'm looking at how setting up as a LLC or S corp may allow you to avoid some self employment taxes, by dividing up some of the money as distributions rather than income. Not sure if anything is there, and a lot of this stuff applies differently depending on the details of your situation. Any info of that type would be most appreciated. For what its worth...