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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121114  
Subject: Re: re; Nevada corporation and trading Date: 7/8/2000 1:09 AM
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Does anyone use a Nevada corporation to trade?

I certainly hope not. It doesn't make any tax sense to do so. A corporation (regardless of state of incorporation) has several problems:

-They don't have preferential tax rates for long-term capital gains.

-They can't deduct capital losses, except against capital gains.

-Without any business activity, they run afoul of personal holding company rules, the worst being a flat 39.6% tax rate.

I'm sure others probably know of more drawbacks. The only benefit I can think of right now is some possible protection of the assets of the corporation from personal creditors. But even that is pretty weak protection and at a pretty high tax cost.

--Peter
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