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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15587
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I would like to set up a partnership to invest in stocks, real

Resolved Question:

I would like to set up a partnership to invest in stocks, real estate, and import export. The partners would be my husband and members of my family. I reside in CA but some of my family reside in the East.
Which structure would be better suited to our needs
LLC or a basic general partnership?
The reason for placing all the different business functions under one ptrship is so that the losses from one activity can offset the profits of another activity.

I would be the general or main partner and the other ptrs would have a percentage.
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.

Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

How are you today?

Customer : fine thanks for responding
Megan C :

Yes, either way LLC or general partnership you're taxed the same

Megan C :

An LLC is taxed like a partnership

Megan C :

However, your gains and losses will retain the same character as if you made the profits yourself - so, sale of stocks would be capital gains or losses, etc

Customer : so that means that any gains or losses are passed through to the ptrs according to pct ownership right?
Megan C :

That is correct

Customer : is the filing and reporting for an LLC likr a corp? What are the advantages of a simple partnership over ran LLC
Megan C :

No, the filing and reporting of the LLC is not as strict as the accounting of a corporation.

Megan C :

From a tax perspective, there's no advantage or disadvantage of choosing LLC

Customer : what is the advantage of an LLC and what is the difference from a simple ptrship
Megan C :

It's more of a legal difference. You have liability protection with an LLC...general partners have unlimited liability for the debts and obligations of the partnership. With the LLC only the LLC is liable

Megan C :

so theoretically you could walk away from debts to the LLC and as long as you didn't personally guarantee any debt, not be impacted.

Customer : so in an LLC even the general partner is not liable?
Megan C :

There is no general partner of an LLC

Megan C :

only members

Customer : is my assumption correct that the losses and gains of the different activities ie. loss from import tradin can be written off against income frlom stock trading?
Megan C :

Stock trading is capital, and import trading would be ordinary so the losses of the stock trades would only reduce the import trading income by up to $3,000 per year

Megan C :

Everything is taxed the same way as it would be for an individual

Customer : if the stock is held for less than 12 mos, then it is considered ordinary income, correct? then in that case can that income be offset by operating loss of the import business?
Megan C :

It's still capital. Ordinary loss reduces income, though - so your capital gains will be lower

Megan C :

it's when you have capital losses that your losses are limited

Customer : do I need a lawyer to set up an LLC or partnership, or can I file online
Megan C :

You can open it yourself, although I always suggest using a lawyer to make sure everything is correct. But, you could also use a service like LegalZoom.

Customer : that sounds good, thank you very much
Megan C :

You're welcome.

Megan C :

Is there anything else I can assist you with tonight?>

Customer : no, thank you!
Megan C :

If not, please rate my response as "excellent" so that I may receive credit for assisting you today

Customer : will do
Megan C :

Thanks so much!

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15587
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 3 other Tax Specialists are ready to help you
Expert:  Megan C replied 1 year ago.

Thanks, XXXXX XXXXX your positive rating. Please come back and visit me for any of your tax, finance, or social security needs. It was a pleasure working with you today.

Thanks

Megan

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Megan C
Megan C
Tax Professional
15587 Satisfied Customers
Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level