Legal Question in Tax Law in California

company trading in stocks

I have strong interest to actively trade in the stock market for which I intend investing $25,000 or more, I would like to incorporate a company and actively trade on behalf of the company.

I would very much appreciate if you could kindly let us know if the incorporated company is treated as an 'Active Trader' for taxation purposes. What would be the revenue, sales and profit for such a company for reporting purposes.

Asked on 10/08/03, 12:31 pm

1 Answer from Attorneys

Ken Koenen Koenen & Tokunaga, P.C.

Re: company trading in stocks

You can't change what you are, simply by incorporating. You will be able to deduct some of your expenses, but you will need to report capital gains and losses, like everyone else.

You might want to consider investing in real estate rather than stocks ... your capital gains can be deferred when you sell, plus you get significant tax deductions for depreciation, interest and property taxes.

More people have become wealthy in real estate investment than have investing in the stock market (stock brokers are the one's who get wealthy from your trades).

I do monthly seminars on real estate investment strategies, so let me know if your are interested.


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Answered on 10/08/03, 12:53 pm

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