Accountant Suggests S-Corp

[carlo]

You can't hide anything in an S Corporation--at the end of the year all the earnings have to be passed out to the stockholders(you) giving the Subchapter S Corporation a net of Zero earnings.
The Subchapter S Corporation can be used to protect an individual with assets which will be shielded from lawsuits resulting from activities of the Corporation.
Example, the corporation sells bad tomatoes and John J. ends up in the hospital or worse. John J. sues the corporation but the president(Peter P.), who has assets of 20 million would be protected by this corporate shield ala the tobacco companies.
I don't see the value for you and in fact you will only have more difficulties and expenses with the corporate set-up which includes yearly stockholders meetings.You're not selling tomatoes and the only suit you may have is flipping a casino chip in someones eye, in which case your insurance agent can sell you personal liability insurance.

regards,
carlo

[Paul2432]

Astro gave you good advice. This idea comes up here from time to time. The consensus has always been that setting up an S-corp for the purpose of gambling is illegal.

Paul

[carlo]

Have to add-you may not have to bring the earnings to zero but then you be taxed at the corporate rate which is lower than the individual but herein lies the problem:

If you pay the corporate tax rate on the retained earnings---as an example $30000--what can you do with the earnings? You personally can't use them as they belong to the corp[oration--if you do use them,at the very least you will again be taxed on your receipts which amounts to double taxation on the $30000.

Get rid of your accountant-I've elected Subchapter S Status and its been awhile but you cannot and will not escap[e taxes. KISS [img]/images/graemlins/smirk.gif[/img].

regards,
carlo

[Misfire]

Since all the internet poker sites are outside the US, shouldn't the money only be taxed when you cash it out and bring it back to the states?

[moondogg]

[ QUOTE ]
Since all the internet poker sites are outside the US, shouldn't the money only be taxed when you cash it out and bring it back to the states?

[/ QUOTE ]

No, it's taxed when you earn it. It doesn't matter where you are at the time.

[mcozzy1]

Hey Lucky...my accountant suggested this as well. She did some legal research and said it was fine (Casinos are legal in Arizona and I play there a lot).

There are expenses associated with it (set up fees, payroll, etc), but it's worth it in the long run). It can be a pain in the butt to do because you have to follow the rules. Things like using quickbooks and taking owner's draws aren't as fun as playing, but the SE tax can be bypassed. I recommend it.

[TomBrooks]

You might be able to deduct gambling related expenses that you weren't able to before. Maybe you could deduct them anyway though. For instance, the purchase of 2001fp monitor and travel expenses to a casino.

[carlo]

You will set up a US Corporation for which most people(if not all) will need a lawyer--I don't see lawyer's and accountants fees being less than 2K--haven't done this in a while. US Corporations pay taxes on proceeds from other countries as any individual would. Your accountant wouldn't have any idea of how to set up a foreign corporation but this is really getting out of hand.

Earnings are taxed in the Corporation or if S Chapter will be taxed to the recipient. This is an advantage of Subchapter S in that there is a corporate shield for liability and the monies can be p[assed to the principals without double taxation. When I had mine(not for gambling), at the end of the year I bonused myself so that the corporation payed no or minimal taxes but I still had to file a corporate tax return along with an individual tax return. There was a time when the corporate structure allowed one to put more into a pension plan as apposed to an individual(25% vs 15%) but this is no longer so. That was the reason I incorporated but after a few years I dissolved the corporation as the advantage was lost.

Really, your acountant sounds incompetant--there is no free lunch--keep it clear and clean and you'll have less headaches. One thing for sure--each year you will pay him fees for the corporation and individual structures. Imasgine having to do all the things that General Motors has to do--stockholders meetings,corporate board meetings,etc. and pap[er documentation to show that these things are done. You will become dependent upon legal and accounting advice which is absolutely unnecessary in your case.

LAY DOWN IN THE MIDDLE OF THE FLOOR UNTIL THE FEELING GOES AWAY [img]/images/graemlins/tongue.gif[/img].

REGARDS,
carlo

[carlo]

If you file a Schedule C, as an individual business or sole proprieter you can expense items related to your business such as a monitor,etc. This is not different in the corporate and individual structures.

regards,
carlo