Well, I've decided what I'm going to to in response to the new margin rules. I've spoken with several of my family members and we're going to pool our money together and let me trade it. Basically a small hedge fund. I'll keep a fee for my services and they will share in the profits. Even though it's family, we still want to make it all legal by forming a corporation. They will all be responsible for their own taxes this way as well. This is where I need some advise. First of all, can I even do this in the first place? Do I need a series 7 or any other licenses? I know some of you have traded this way from your posts (Preatorian2, Rtharp, etc) and I'm just wondering what the best way is to go about it. Did you guys actually set up some sort of entity or did your family/friends just put the money in your account? Which type of entity is best? LLC? Limited partnership? S-corp? Any recommendations or ideas would be greatly appreciated.
huby, I strongly recommend you get professional accounting help by those familiar with trading and investing. A few such firms are: http://www.taxtrader.com http://www.greencompany.com
You do need to get good advice on how to do this. You're probably looking at $700-$1,000 in attorney fees to set-up an entity to trade through legally. Then the initial consultation fee by the Accountant or attorney of ?. Then an annual license fee to the State of $60 or so, plus $300-$600 for a CPA to prepare the return each year. Hopefully you have a winning system to make this worth it. Of course you could try to do most of it yourself but that's kind of scary.