Can I take advantage of a low tax state through a corp?

[Alpha13]

What is the name of your state? California

Hi,

I'm a stock trader who lives in CA. If I open a corporation in neighboring Nevada, which has no state tax, will I not have to pay any state taxes on my earnings assuming it comes from accounts connected to my Nevada company?

Thanks

[LdiJ]

Originally Posted by Alpha13

What is the name of your state? California

Hi,

I'm a stock trader who lives in CA. If I open a corporation in neighboring Nevada, which has no state tax, will I not have to pay any state taxes on my earnings assuming it comes from accounts connected to my Nevada company?

Thanks

Nope, that won't work for you. Even if you could somehow finagle it, if you are a C-corp you will get hit with double taxation on the federal side, and if you are an S-corp you will have to pay CA tax anyway.

[Alpha13]

Are there other options that may work, say for example an LLC or some other kind of partnership?

Thanks

[irsos]

Corporations are taxed at regular corporate tax rates on long-term capital gains.

[LdiJ]

Originally Posted by Alpha13

Are there other options that may work, say for example an LLC or some other kind of partnership?

Thanks

Every type of entity other than a C-corp or an LLC electing to file as a C-corp has pass through income. Pass through income would definitely cause you to pay CA income taxes on the income.

A C-corp or an LLC filing as a C-corp would cause double taxation.

You need to simply accept the fact that it won't work. Now, if you wanted to maintain your primary residence in NV that would be a different story.