S Corporations for Traders: Why They’re a Bad Idea
When you decide to take your day trading business to the next level, there are a number of legal entities you can choose to form for tax and legal purposes. Establishing a formal business for your day trading enterprise can provide you with some tax advantages at year-end, helps separate and protect personal assets, and can give you access to benefits traditional businesses generally enjoy.
Not all business entities are a good fit for day traders though. In addition to popular choices such as an LLC, LLC partnership, or a C Corporation, you may be considering S Corporation status for your ventures.