S-Corp for Investing Activities Only

[socalvestor]

Hello fellow members,

My brother and I are thinking of forming a Delaware corporation and electing it as an "S-Corp", to invest in equities, bonds and option trading. We will not do any kind of business through this entity other than our investment plan.

The company's initial capital contribution will be from my brother and myself, split 50/50.

All future income of the company will solely be from capital gains/losses through trading in stocks and options, dividends and interest payments.

Is it advisable to form an S-Corp. to do investing only, and is "Portfolio Income" allowable for an S-Corp?

Lastly, what type of bookkeeping or accounting software shall we use to keep track of our investments, financial statements, and tax filing software?

Thank you!

Billy

[Fulcrum]

Hire an accountant or tax lawyer. Nuff said

[Twhansbury]

Falcrum is right, Work with an accountant and also who you plan on doing your trades though. (a lot depends on level of investing)
That being said S corps do not have any restrictions on investments except in other S corps.