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jfh
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stranger
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Reged: 05/22/05
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Posts: 2
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SMLLC or S-corp?
#490 - 05/22/05 07:36 AM
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I have been operating as a sole proprietor in IL for 2 years. I have commodity losses (section 1256) that will carrry over to future years. I will have gains this year, and of course want past losses to offset those gains. I would like to form an entity, in IL or WI (currently live in IL, but moving to WI in August 2005), but am worried that by doing so, commodity gains for the entity will not be able to use past losses for the sole proprietorship for offset.
In addition, a primary reason to start the entity is to be considered a proprietary trading group for reduced commissions at the CME. To start with, I will be the only member, but adding members (traders who trade their money or firm money as part of the entity) could be a possibility.
IL or WI? SMLLC or S-corp?
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Re: SMLLC or S-corp?
#492 - 06/13/05 11:25 AM
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Regards and sorry for delay.
If you are moving out of IL, then I recommend you set up the entity in your new home state. WI should be fine.
We can look into WI more in a half hour consultation. You can upgrade to our entity formation service afterwards.
We have set up many entities for those new corporate memberships on the CME. Good news, you are not full members of the regular exchange, so you can avoid self employment taxes.
By the way, IL just changed their IL Replacement tax of 1.5% on all entities. Now if you are a trading company LLC or partnership, you can avoid the IL replacement tax.
Don't worry, your capital loss carryovers can offset any future capital gains. We recommend pass through entities, which pass through capital gains to your individual returns, so you get to use your capital loss carryovers.
We can help you further in a half hour consultation.
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Robert A. Green, CPA & CEO
GreenTraderTax.com
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jfh
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stranger
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Reged: 05/22/05
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Posts: 2
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Re: SMLLC or S-corp?
#497 - 07/21/05 07:56 AM
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Thanks for the reply. Although I am moving to WI, I will be a student, so I could still use IL for permanent residence, if there is a tax advantage. I may likely live in Illinois in the summers and return after graduation in 2 years. Let me know if this still requires consultation, or if I should go right to the entity formation.
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Re: SMLLC or S-corp?
#498 - 07/22/05 07:15 AM
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Regards. Probably makes sense to set up the entity in IL, to be domiciled there for the long term, as you plan to continue your individual domicile in IL.
Plus IL is good as long as there is no IL Replacement tax on your trading company LLC. So you will pay taxes in IL as a resident.
We do need to check the WI & IL resident rules a little to see the effects of time in a state as a student. We can handle that in the entity formation service.
So yes, you are ready to sign up and we can tackle this all ASAP.
Thanks.
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Robert A. Green, CPA & CEO
GreenTraderTax.com
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