Hi! I know you guys aren’t big fans of the stock market, but wanted to know if I invest in stocks using a brokerage account under my LLC’s name, can I transfer some of the gains through a K1 if taxed as an s-corp? would this work? Thanks for adding humor to some relatively dry topics!
I’m not a tax professional but think you are leaving some information out of your question. You would only file a K-1 if you were a partnership (could be an LLC with partners). Matt & Mark recommend being the sole owner of an S-Corp so that would not be a partnership based on their strategy but your S-Corp may be structured differently. If the LLC who own’s the brokerage is different than the S-Corp (whether an S-Corp or LLC with S election), your question might make more sense - you have partners with the brokerage LLC and then transfer earnings to the S-Corp etc… An LLC can open a brokerage account and you can trade stocks in that account and then transfer gains out of it as a draw. Your tax return would just report the income correctly. In your case, you would be recording dividends, interest, short and long term capital gains - whatever the source of the income is from that brokerage account. You might want to add more context to your question so you can get the answer from Matt and Mark. Good luck.