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How To Structure A Trading Business For Significant Tax Savings?

  If you actively trade securities, futures, forex or crypto, consider setting up a trading business to maximize tax benefits. With a sole proprietorship, a trader eligible for trader tax status (TTS) can deduct business and home-office expenses and make a timely Section 475 election on securities for tax loss insurance and a potential qualified business income (QBI) deduction. By forming an LLC taxed as an S-Corp, a TTS trader can also deduct health insurance premiums and a retirement plan contribution. An investor without TTS cannot get any of these tax benefits. The new tax law (TCJA) severely limits itemized deductions for investors, while expanding the standard deduction and improving business expensing. TCJA also introduced a 20% deduction on QBI, which includes a TTS trading business with Section 475 income but excludes capital gains and portfolio income. With TCJA, TTS and Section 475 are more valuable than ever before. Sole proprietorship An individual TTS trader deducts busi
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Trading company

  Trading companies are specialists that cover all export and import operations and procedures. A trading company buy products in one country and sold them in different countries where it has its own distribution network. This kind of companies mostly work with high production volumes of products such as raw materials, chemicals, generic pharmaceuticals, etc. The activities of a trading company include: Identification of suppliers in different countries with capacity to supply large volumes of generic products at competitive prices. Negotiating the terms of sale and delivery of products. Financing and assurance of payment to the supplier-exporter. Managing logistics and transport. Managing customs and barriers of international trade. Distribution and sale of the products through its retail network. At present, trading companies specialize in emerging countries in areas of Asia, Africa or Latin America. Its function is to identify competitive suppliers, negotiate and purchase their pr
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What Does “Trade What You See” Really Mean?

" Trade what you see ” is a phrase traders love to throw around, but the true meaning behind it is mostly unknown. Trading what you see has become a hollow phrase and its true meaning has been forgotten. By the end of this article you will understand why you probably don’t trade what you see either. Illusion of Control Bias “Believing one can control and influence the outcomes that one actually has no control over.” (Langer 1975)  2 We have recently talked about the illusion of control problem and this bias plays an important role when making subjective trading mistakes. You  make your analysis,  you  follow your rules,  you  pick a trade that fits  your  criteria and then it turns into a loss. No matter how good your analysis and how well you follow the rules, even the best setups will fail. Traders think that the best setups won’t fail and then they get emotionally attached to the trade which, as we all know, leads to major losses and disasters. The chart may tell you that the
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Trading As A Business

  The ideas behind “ treating trading like a business ” are very important to get you on the right track and after we have taken a look at the different aspects, I am sure you will get some ideas on how to take your trading to the next level and treat it more like a business.  As a trader, your setups and your strategies are your products. Your setups are a set of rules and triggers to help you find potentially profitable trades. Whether your setups consist of classic patterns, indicators, pure price action or a combination doesn’t matter here. What is important is that YOU must be the expert in your setups and patterns. You must know every little detail, when the setup works best, during which market conditions it doesn’t work, in which markets and timeframes to use it, how to improve the odds, how to set stops and pick targets, when to move stops and how to manage trades , when to add to a position or take some off the table, when to stay out, etc. So , really commit. In my trading,
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