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Old 04-27-2012, 11:54 AM
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S-Corp Investing

Hello,

I am founder of 15 year old Illinois SCorp. (3 other owners).

Approx annual revenues of $2.5MM

I am interested in taking some of our current "cash" and investing / trading.

My question are in regards to how gains would be taxed...

Example:
I plan on opening up a "Corporate Etrade" account.

Say I take $20,000 and invest that in a stock.... Sell that stock 1 month later at $50,000 ($30,000 in gain)...

Assume that this $30,000 is the only trade for the whole year, I sold and simply have $50,000 now sitting in the Etrade account.

My question... is this $30,000 gain immediately passed through as "income" to the Scorp? Or is not a gain until I actually take it out of the Etrade account?



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Old 04-27-2012, 08:31 PM
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“My question... is this $30,000 gain immediately passed through as "income" to the Scorp? “---->Iguess it is income to the S corp as part of income in AAA and is passed through to Sch K1 andform 8949& Sch D/1040. As an owner of the S Corp is taxed on your share of the earnings of the corporation without regard to any distributions taken. Those earnings retain their character in the hands of the owners - meaning that ordinary income is taxed at ordinary rates, capital gains are subject to the capital gain rates and rules, and passive income is subject to the passive income rules.


Last edited by Wnhough : 04-27-2012 at 08:48 PM.


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