Business Funds....

Hello all,

On January 6th of this year 2006, I started doing some work from home as a Sole Proprietor, I have applied for Illinois DBA license through the business registration form. I opened a bank account in the name of the business to make sure even though the businesses income and my income are one in the same, I'd be able to keep better track of expenses.

I'm happy to say business is going quite well, I invested $15,000 of my own money to get up and running and in only two months have more than tripled it.

There's the back ground.... here's my question... business is going quite well now, and I do not need any more funding, and my expenses are quite low (as I am the only "employee"). I don't want this cash just sitting in a bank account.

Is it possible/legal to open a brokerage account in the name of the company and take the cash out of the bank and trade with it? (To be clear, I don't intend to take all the money, I'll still have some backup in case of emergency)

If I do trade with the companies money, and lets assume (dangerous I know) I'm successful does that money I made get reported on my schedule "C" as income? How do I deal with that?

I'm sorry, I realize I asked a lot of questions, but at least to me they are important.

Thank you all so very much for your time, Shhhh

Reply to
Shhhh
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"Shhhh" wrote

You want separate bank acounts to keep business revenues and expenses separate from personal revenues and expenses (the best you can).

While you may have just the one source of incomes, you have to be able to separate easily the business expenses from your personal expenses.

As a sole-proprietor, the account is yours, and the income - interest, dividends and gains (or losses) are taxable to you regardless of how you title the account.

Interst and dividends would go on Schedule B, capital gain (or losses) get reported on Schedule D.

Your business is not in the stock market, so those transactions do not go to Schedule C.

You are taxed on your bottom line business profits or losses and not what you take out of the business account.

Reply to
Paul Thomas, CPA

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