Stock Trading Laws
I do some stock trading on my own. If I wanted to do it as a business, how would I go about that?Usually, a person would incorporate or form an LLC, but because of the IRS changing their policies, there really isn't any reason for you to do this. Before IRS policies changed, a person could pay themselves a small wage while claiming an S status. This would allow the excess cash flow through them personally as dividends, which would help them avoid paying any self-employment taxes. Now, you are required to pay yourself according to the amount of income that the company produces, taking any advantage of having an LLC away. If you attempt to avoid self-employment taxes, and get caught, you could face large fines and/or severe penalties. However, if you want to recoup some of your expenses, you could claim a sole proprietor status and deduct anything related to your business; office supplies, computer supplies, internet fees, etc.
I've been day trading stocks for years and I am wondering if I can register this profession as my home business. If yes, under what category?You should check into the SEC (Securities and Exchange Commission) to make sure whether or not you will need to register when trading stocks for other individuals. Usually, if you are buying/selling stocks/securities, you will need to register. There are exceptions to this law, but the law itself can be a complicated one to understand for many people who are not familiar with it. Regardless, you will need to be registered with your state in order to a business tax if you have one. Another thing to consider is applying for an LLC. By doing this, you will protect your personal assets in the event of a law suit against the business.
I entered into an agreement with a stock trader to manage an account for me. He said to me in an email that he could get a special deal where trades would be $4 instead of $7. We signed the agreement, he began trading. It has been a month and the trades are still $7. Isn't this a breach of contract?Because you have an agreement in writing that says the trades would be a certain amount and they have yet to change, you would have grounds to claim for a breach of contract. The first thing you may want to try is to send a letter of demand that states you want refunded the difference in amount that you agreed upon. In the letter make it clear that you plan to end the agreement if you don't receive the refund soon. You could report the broker's activities to the BBB if he is a representative of a brokerage company.
f my husband opened an online stock trading account in his name only, am I entitled to half if he divorces me? He has a Scot trade account that I have documents that he has been taking money from our joint checking for 3 years to tradeIt is possible that the account would be considered marital property due to the fact the account was opened during the marriage and your husband used your joint account to fund the trading. Even though the account was in your husband's name only, marital funds were used to sponsor the trading. Based on this, you should be entitled to an equal portion of the funds in the event of a divorce.
Before attempting to trade stocks, you should consult an expert who is familiar with the stock market and who can lend legal insight to the risk of stock trading.