Tax Question - Regarding Joint Trading Account (is the Dr. in the house?) | FerrariChat

Tax Question - Regarding Joint Trading Account (is the Dr. in the house?)

Discussion in 'Other Off Topic Forum' started by cohiba_man, Feb 29, 2004.

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  1. cohiba_man

    cohiba_man Formula Junior

    Jan 23, 2003
    937
    Canada
    Full Name:
    John
    #1 cohiba_man, Feb 29, 2004
    Hi,

    I'm interested in opening a joint trading account (futures trading, e-minis) with my friend who trades and I'm wondering what the tax implications are? I'm in Canada btq. Is each person taxed on how much they earn or are each of us taxed on the gains of the account as a whole? For instance he won't be trading for a couple of months so it will just be me, will he still be taxed on my earnings?

    Thanks
     
  2. Texas Forever

    Texas Forever Seven Time F1 World Champ
    Rossa Subscribed

    Apr 28, 2003
    75,960
    Texas!
    #2 Texas Forever, Feb 29, 2004

    Cohiba, this can be a complicated question, e.g., is your joint account a partnership or just an undivided interest; but for US tax purposes, the practical answer is very simple -- namely, whoever's social security number is on the account will be the one that the IRS will look to for it's bite of the apple. However, I strongly urge you to formalize your arrangement before going any further. Trading anything on margin is very risky business. You need to make sure you and your buddy have fully worked out the upside and downside of this arrangement.

    As always, I must add that giving free advice does not make you my client. In fact, I strongly urge you to hire competent counsel to protect your interests.

    Good Luck, DrTax
     
  3. cohiba_man

    cohiba_man Formula Junior

    Jan 23, 2003
    937
    Canada
    Full Name:
    John
    #3 cohiba_man, Feb 29, 2004
    Thanks a lot.
     

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