I definitely understand not wanting to create another company. However I must caution you. When making the election you are saying that is your main source of income – trading. Now if you have a consulting business, let’s say you have $100K of income from that and $40K of income from trading. The IRS may argue that your main source of income is not trading and that it is not your main line of business. However if you had a seperate entity and all it did was trading, the IRS would not be likely to win that argument. I know it is quirky, but the statistics indicate that it is much safer to do it that way.

Consider the costs and benefits. Again – I’m not a tax attorney, I just play one on this blog. Just kidding. Seriously though make sure you take everything under consideration. A great company that does the whole process is tradersaccounting.com. All they do is accounting for traders. They also do the incorporation. I haven’t used them, but a colleague of mine has and their incorporation work/consulting is the best I’ve seen. The fact that they focus on the trader makes sure they have the best work for a trader as opposed to a generic lawyer.

Good luck Ray and always feel free to ask a question. It tickles my brain and keeps the neurons active.

Do you happen to know if an existing business (s-corp) can be used for trading and filing for 2008 trader status if the existing business does not deal with finance at all? Does IRS need to be informed of this? I don’t want to create a new corporation since I already have my consulting business and need a trader status also. I am also not sure of how to pay salary etc. etc. if you are a trader, any comments?.

Great blogs—Thanks!

/Ray

As for financials… I watched them, GS in particular. I bought 2 Feb $200 calls at $8.60 and sold at $9.50 for a $178.50 2 day gain on a $1721.50 investment. My commissions were $1.50 buying and $1.50 selling so net $178.50 all said and done.

I do think there is some downside trading opportunity with this stock for now. I also think it is getting close to longability. Is that a word? It is now.

I work with traders who use mark to market, and I had them try to explain it to me on numerous occasions. No one before explained it to me as clearly as you have. Thanks for the Step by Step, Laterz!

P.S.
Maybe financials now? hehe.. they fell thru the bottom of the previous trading range, but might settle here, and there is lots of room for retracement

Out of curiosity, do you have an LLC? I’ve been thinking of creating one but don’t really know too much more about it as far as the legal issues go.