__________ Trading Through a Separate Entity
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Why Form an Entity? updated 4/23/15

Tax planning / Entity formations done after March 30, 2010 updated 2/1/11

A Trader's Choice of Entities updated 1/20/14

Forming Your Own Entity updated 1/20/14

Short n' Sweet Trader's Entity Formation Services updated 0/00/00

Court approved "unlimited" annual Roth IRA funding mechanism using multiple entities  updated 3/18/11

Elect Mark-to-Market for 2015/2016 using a separate legal entity.  This is the time of year many traders are forming their entity.

Why Dissolve (or close down) your Entity? updated 3/6/14

Be wary of high-priced one-size-fits-all packages offer via the internet:

U.S. Tax Court deals a blow to income tax motivated dual-entity structure tax planning.  C-corporation acting as the manager and member of a LLC (where the actual business operations are run out of), is without substance and must be disregarded for federal tax purposes, making the LLC a SMLLC and as such that too is disregarded and the whole package collapses upon itself.  The result is that the individual is a sole-proprietorship and is treated as such for federal income tax purposes.  For traders this puts in jeopardy such dual-entity tax benefits including M2M elections, Retirement Plan deductions, and in cases where the individual has other income to provide support for his family, even TraderStatus itself! - T.C. Memo 2011-19, January 24, 2011 
Concerned about your own dual-entity set-up?  While planning for the eventual possibility of such an attack by the IRS and the Courts, we have been correcting these structures for years, eliminating or deconstructing the sham set-ups where appropriate, and often lowering ongoing annual compliance costs as a result, contact us

Sec. 269A. Personal service corporations formed or availed of to avoid or evade income tax
    (a) General rule If- (1) substantially all of the services of a personal service
      corporation are performed for (or on behalf of) one other corporation, partnership, or other entity...

Warnings regarding IRS registration.
Modernized I-EIN  Online Mod IEIN  Federal Employer Identification number EIN  or  TIN

PIA Approval Date: November 7, 2007
Mod IEIN System Overview:

Q. Does the system ensure  "due process" by allowing affected parties to respond to any negative determination, prior to final action?

A. No. The system will not accept unworkable submissions.

Q. Do other IRS systems provide, receive, or share data in the system? If YES, list the system(s) and describe which data is shared.

A. Yes. ERAS receives data from Mod IEIN via the ESIGN command code.

Q. Have the IRS systems described in Item 10 received an approved Security Certification and Privacy Impact Assessment?

Yes.  IDRS/ERAS:  Certification and Accreditation approved on May 18, 2006, expiring on May 18, 2009.
Privacy Impact Assessment approved on April 12, 2005, expiring on April 12, 2008

Q. Will other agencies provide, receive, or share data in any form with this system?

Yes - Tobacco and Trade Bureau and  Treasury Inspector General for Tax Administration (TIGTA) and Government Accountability Office (GAO) have audit authority.,,id=176436,00.html


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