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Posted by nickr on November 23, 2006, 2:12 am
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At the end of the year, if I incorporate a trading account I
have, can I take my profits, or part of them and put them in
an IRA of some sort? (Assume I have trader status and have
no other job.)
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Posted by Harlan Lunsford on November 24, 2006, 2:27 am
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nickr wrote:
> At the end of the year, if I incorporate a trading account I
> have, can I take my profits, or part of them and put them in
> an IRA of some sort? (Assume I have trader status and have
> no other job.)
Any profits you have from schedule c stemming from the first
part of the year will qualify for contribution to an IRA,
within the other parameters of deductibility of course.
However once incorporated, only a salary paid you (with
concomitant FICA and FUTA taxes plus maybe some state
unemployment taxes) will qualify you for IRA contributions.
Not a good idea maybe.
ChEAr$,
Harlan Lunsford, EA n LA
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by Bill Brown on November 24, 2006, 2:27 am
Please log in for more thread options nickr wrote:
> At the end of the year, if I incorporate a trading account I
> have, can I take my profits, or part of them and put them in
> an IRA of some sort? (Assume I have trader status and have
> no other job.)
No, not this year unless you have already elected trader
status for 2006 before April 15, 2006.
I suggest you review the information available at
http://fairmark.com/traders/ and then consult a local tax
professional who specializes in this area.
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by Deborah King on December 3, 2006, 4:05 pm
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> At the end of the year, if I incorporate a trading account I
> have, can I take my profits, or part of them and put them in
> an IRA of some sort? (Assume I have trader status and have
> no other job.)
You will need earned income to make contributions to a
retirement plan. Trading profits are not considered earned
income whether you have trader status or not. You may be
able to transfer some of your profits to earned income if
you operate through a trading entity, but incorporation
(especially a C Corp) may not be the best route.
Deborah King, CPA
Lenoir NC
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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