I got both 810 and 811 within 2 weeks of verifying. Refund hit my account 3 days later. hang in there!

These codes are driving me insane!!! Why cant the IRS just speak english instead of this number nonsense 🤮

Great discussion here! I wanted to add another perspective as someone who's been trading futures through an S corp for three years now. The 60/40 treatment definitely passes through as others have confirmed, but there are some practical considerations I wish I'd known upfront. One thing that caught me off guard was quarterly estimated tax payments become more complex with an S corp. You need to estimate not just your trading income but also plan for the reasonable salary requirements. I ended up underpaying in my first year because I didn't properly account for the salary portion. Also, if you're doing high-frequency futures trading, the bookkeeping gets more intensive. You'll need to track all trades at the entity level and ensure proper documentation for the mark-to-market accounting. It's not just about the tax benefits - there's real operational overhead that scales with your trading volume. That said, the self-employment tax savings on distributions above reasonable salary have been significant for me. Just make sure you run the numbers for your specific situation before making the jump. The break-even point varies a lot based on your trading profits and state requirements.

As someone who recently went through this exact decision process, I can confirm what others have said - the 60/40 split does pass through S corps unchanged. However, I'd strongly recommend getting a comprehensive analysis done before making the switch. One aspect that hasn't been fully covered here is the impact on your ability to deduct trading-related expenses. With an S corp, business expenses like trading software, data feeds, home office, etc. become corporate deductions rather than Schedule A itemized deductions (which are often limited). This can actually provide better tax treatment for your trading expenses. Also worth noting - if you're considering trader tax status, it's generally easier to establish and maintain TTS through a business entity like an S corp rather than as an individual. The IRS tends to view trading through a formal business structure as more credible evidence of being "in the trade or business" of trading. The key is running detailed projections that include ALL costs - state fees, payroll processing, additional accounting, reasonable salary requirements, etc. In my case, the break-even was around $75k in annual trading profits after accounting for all the extra costs and complexity. Below that threshold, the administrative burden wasn't worth the modest tax savings.

Great question about tax-loss harvesting for UTMAs! One important consideration that hasn't been mentioned yet is the impact on financial aid eligibility. UTMA assets are counted as student assets on the FAFSA at a much higher rate (20%) compared to parent assets (5.64%). While harvesting gains to step up basis is tax-smart, you might also want to consider the timing of when to do this relative to college planning. If your kids are getting close to college age, you may want to weigh the tax benefits against the potential impact on financial aid calculations. Also, make sure you're keeping detailed records of all these transactions. When your children eventually take control of the accounts, having clear documentation of cost basis adjustments will be crucial for their future tax planning.

This is excellent advice about the FAFSA implications! I hadn't considered how the 20% assessment rate on student assets could impact financial aid eligibility. This creates an interesting trade-off between tax optimization and college funding strategy. For families with younger children, the gain harvesting strategy makes perfect sense since you have years to benefit from the stepped-up basis. But as you get closer to college years, it might be worth running the numbers to see if the tax savings outweigh the potential reduction in financial aid. Another timing consideration: if you're planning to gift additional funds to the UTMA accounts, it might make sense to harvest gains first to free up "room" under the $1,250 threshold before adding new money that could generate additional dividends or interest. The record-keeping point is crucial too. I'd recommend creating a simple spreadsheet tracking each sale/repurchase transaction, the gain realized, and the new cost basis. Your kids will thank you for this documentation when they're older!

I appreciate everyone sharing their experiences and insights here. As someone who's dealt with similar partnership tax issues, I wanted to add a few practical considerations that might help. The strategy you're describing reminds me of what tax professionals call "basis shifting" - trying to manipulate the timing of income and distributions to minimize taxes. While not inherently illegal, it's definitely in the gray area that attracts IRS scrutiny. One thing I learned the hard way is that partnership taxation is incredibly complex, and seemingly small details can have major consequences. For example, if your LLC has debt, that debt increases your basis (which is good for taking distributions), but only if you're personally liable for it. Non-recourse debt has different rules. Also consider the long-term implications. Even if this strategy works in the short term, you'll eventually need to repay the loan with after-tax dollars. Plus, if your business becomes profitable again, you might face higher taxes later when your basis is depleted from the distributions. My advice? Document everything thoroughly if you decide to proceed, and make sure you have legitimate business reasons for both the loan and the expenses. The IRS is much more forgiving of strategies that serve actual business purposes beyond tax minimization. Have you considered alternatives like adjusting your profit-sharing percentages or exploring guaranteed payments to partners? Sometimes simpler approaches are less risky.

I've been reading through this discussion and wanted to share my experience as someone who went through a similar situation. A few years ago, my business partner and I were in almost the exact same position - looking at a loss year but needing cash flow for personal expenses. We initially considered something similar to what you're describing, but our CPA warned us about several issues that others have mentioned here. The main problem is that you're essentially trying to create artificial losses while extracting cash, which is exactly what the IRS looks for in abusive tax strategies. What we ended up doing instead was restructuring some of our compensation as guaranteed payments for actual services we were providing. This gave us the cash flow we needed without the basis complications or potential audit risks. Yes, we paid self-employment tax on those payments, but it was much cleaner from a compliance standpoint. The other thing our CPA pointed out is that even if your strategy worked in year one, you'd be setting yourself up for problems down the road. When the business becomes profitable again, you'd have depleted basis from the distributions, meaning future profits would be more heavily taxed. I'd really recommend getting professional advice before implementing anything like this. The partnership tax rules are incredibly complex, and the penalties for getting it wrong can be severe. Sometimes the "boring" approach is the safest one!

Has anyone tried using a Virtual EFIN service? I've seen some advertised but not sure if they're legitimate or if it's just another term for illegally renting credentials.

I understand the pressure to handle more clients, but as others have mentioned, buying or renting EFINs and PTINs is definitely illegal and could end your tax preparation career permanently. Here's what I'd recommend for expanding capacity legally: 1. **Hire qualified preparers** - They can work under your EFIN with their own PTINs. Even hiring 1-2 seasonal preparers could double your capacity. 2. **Partner with existing firms** - Many established offices offer space-sharing or revenue-sharing arrangements during busy season. 3. **Streamline your current workflow** - The AI tools mentioned above sound promising for reducing time per return. 4. **Apply for your own additional EFIN now** - Even if it takes 45-60 days, you'll have it for next season and beyond. The risk/reward just doesn't make sense with illegal credential sharing. You could lose everything you've built for a short-term solution to what should be a long-term business growth strategy. Better to turn away some clients this year than risk losing your license permanently.