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Old 12-05-2008, 12:43 AM
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Investing in Stocks as an S-Corp

Hi There,

Thanks for reading. I have have a small business that is filed under an s-corp (CA). I own the entire co.

I'd like to get back into the stock market now, and I'm not sure if I should invest my personal funds or if I should invest through the company.

The Corp has more money than I do. , and I'd prefer to invest through the company.... But is that smart?

What in terms of taxes would be the smarter move.

Thanks so much.


Last edited by noize : 12-05-2008 at 12:47 AM. Reason: added cali


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Old 12-05-2008, 09:56 AM
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Generally speaking, it is better to purchase stocks in your own name and not through the Corporation. As for the S Corporation, all the trades made would essentially flow to your personal tax returns and gains and losses would be reported on the K-1 on lines 7 and or line 8a.

So, it does not make any reportable difference, and there is no tax benefit to you! But, I would advise you that you can simply take a distribution from the S corporation and purchase the stocks under your own name. This would be the best strategy in my opinion!

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Old 12-05-2008, 04:26 PM
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Thanks so much TaxGuru. This is a great resource.

Have a fantastic weekend.



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