Creating an LLC for stock investments
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I am interested in creating an LLC and transferring stocks that I have large gains in, into this company in which I will be partners with my son. My son will be getting his MBA over a 2 year period and it will cost around $50,000. I want to sell some stocks over the two years and expense his tuition as continued education expense. So for example if his tuition bill for the year is $22,000, I will sell stocks that give me a gain of say $25,000, and report a net income of $3,000 for the year, and that will flow to my personal tax filing. Is this realistic or make any sense?
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There's a small exception to that (because there always is). If you make more than about $100k in profit it may be beneficial how to form an llc in new hampshire and elect S-corp taxation status. That means that, instead of ignoring your business, the IRS treats it as a small business corporation. The upshot of that is that you get to control how much profit is subject to self-employment taxes. The downside is that you have to spend money on tax preparation (the forms are not a DIY project), and you have to pay a payroll company to run payroll for you. If you already have employees this is no big deal, but if you're the only employee it can be a significant expense.