Abstract
The trading of various securities is subject to market rules. However, when securities trading is completed within a business entity, the entity is subject to tax limitations and restrictions. The tax benefits cannot be the dominant purpose for the entity structure; economic substance including profit motive and business purpose for each transaction must be able to be shown.
The trading of investment securities must be housed in the right entity to gain the best economic results as well as to minimize the tax burden. The entity selection process must first consider the characteristics and nature of the securities (e.g., currencies, options, derivatives) trading. Then, the tax prohibitions of each entity must be reviewed in an effort to describe what will qualify and will not be abusive under the tax rules. A team of investment professionals and tax professionals must be involved in the final entity decision.
Recommended Citation
Ray A. Knight & Joseph Lakatos,
Choosing the Best Entity for Investments Trading After Understanding the Tax Limitations and Restrictions,
23
DePaul Bus. & Com. L.J.
(2025)
Available at:
https://via.library.depaul.edu/bclj/vol23/iss1/2
Included in
Accounting Law Commons, Administrative Law Commons, Antitrust and Trade Regulation Commons, Banking and Finance Law Commons, Bankruptcy Law Commons, Business Organizations Law Commons, Civil Law Commons, Commercial Law Commons, Comparative and Foreign Law Commons, Computer Law Commons, Conflict of Laws Commons, Constitutional Law Commons, Construction Law Commons, Consumer Protection Law Commons, Contracts Commons, Disability Law Commons, Dispute Resolution and Arbitration Commons, Estates and Trusts Commons, First Amendment Commons, Government Contracts Commons, Housing Law Commons, Human Rights Law Commons, Intellectual Property Law Commons, International Law Commons, International Trade Law Commons, Internet Law Commons, Labor and Employment Law Commons, Law and Economics Commons, Law and Politics Commons, Law and Psychology Commons, Legal Ethics and Professional Responsibility Commons, Legal Profession Commons, Nonprofit Organizations Law Commons, Oil, Gas, and Mineral Law Commons, Organizations Law Commons, Property Law and Real Estate Commons, Retirement Security Law Commons, Second Amendment Commons, Secured Transactions Commons, Securities Law Commons, State and Local Government Law Commons, Supreme Court of the United States Commons, Taxation-Federal Commons, Taxation-Federal Estate and Gift Commons, Taxation-State and Local Commons, Taxation-Transnational Commons, Tax Law Commons, Transportation Law Commons, Workers' Compensation Law Commons