question on investment

serialkiller

Golden Member
Dec 9, 2003
1,080
0
0
I was just wondering if what I am doing is illegal.

So I invested some money with my friend who plays the stocks game. Every month he sends me the amount we agreed upon. As long as I record this with the IRS and pay taxes on it will it be a legitimate investment?

 

BigJ

Lifer
Nov 18, 2001
21,335
1
81
Why are you reporting it to the Irish Republican Army?

EDIT: Guess it was better than I thought.
 

serialkiller

Golden Member
Dec 9, 2003
1,080
0
0
Originally posted by: BigJ
Why are you reporting it to the Irish Republican Army?

Lame joke. I didn't even read it right. That's what I get when I post right after throwing up :(

ah crap, i meant IRS... ill fix it ...
 

JLGatsby

Banned
Sep 6, 2005
4,525
0
0
Originally posted by: serialkiller
I was just wondering if what I am doing is illegal.

So I invested some money with my friend who plays the stocks game. Every month he sends me the amount we agreed upon. As long as I record this with the IRA and pay taxes on it will it be a legitimate investment?

Actually what you're doing might be illegal. What he is doing could be considered a "hedge fund," in which case you need to be registered as a "accredited investor," which is defined as having a minimum net worth (usually in the millions) or a high income (usually in the mid hundred thousands), in order to invest in his trading activity.

http://www.sec.gov/answers/accred.htm

But on a more realistic note, you probably have nothing to worry about as long as you pay taxes on it, but don't tell uncle sam specifically WHERE you got it from, just that "you got it." Just pay your taxes on it.

The best thing you should do is put your own money in a brokerage account of your own and let him tell you what to trade if you trust this person's advice so much.

I am not an attorney so don't take my advice as gospel btw.

But becareful of alleged "stock gurus." I've been actively trading stocks for 10 years now and have become very good at it and I have seen many people get burned by idiots.

Originally posted by: BigJ
Why are you reporting it to the Irish Republican Army?

ROTFL
 

serialkiller

Golden Member
Dec 9, 2003
1,080
0
0
Originally posted by: JLGatsby
Originally posted by: serialkiller
I was just wondering if what I am doing is illegal.

So I invested some money with my friend who plays the stocks game. Every month he sends me the amount we agreed upon. As long as I record this with the IRA and pay taxes on it will it be a legitimate investment?

Actually what you're doing might be illegal. What he is doing could be considered a "hedge fund," in which case you need to be registered as a "accredited investor," which is defined as having a minimum net worth (usually in the millions) or a high income (usually in the mid hundred thousands), in order to invest in his trading activity.

http://www.sec.gov/answers/accred.htm

But on a more realistic note, you probably have nothing to worry about as long as you pay taxes on it, but don't tell uncle sam specifically WHERE you got it from, just that "you got it." Just pay your taxes on it.

The best thing you should do is put your own money in a brokerage account of your own and let him tell you what to trade if you trust this person's advice so much.

I am not an attorney so don't take my advice as gospel btw.

Originally posted by: BigJ
Why are you reporting it to the Irish Republican Army?

ROTFL

Thanks for the heads up. The amount invested and returned every month is no where near millions... not even in the ten thousands....

 

iwantanewcomputer

Diamond Member
Apr 4, 2004
5,045
0
0
you could report it as a loan and interest. make sure you only report the extra money as income, and not the original investment
 

serialkiller

Golden Member
Dec 9, 2003
1,080
0
0
Originally posted by: iwantanewcomputer
you could report it as a loan and interest. make sure you only report the extra money as income, and not the original investment

er? how does that work? when turning in the w2 Im sure the numbers of my salary arent going to match up if I add in investments into that...
 

JLGatsby

Banned
Sep 6, 2005
4,525
0
0
Originally posted by: serialkiller
Originally posted by: JLGatsby
Originally posted by: serialkiller
I was just wondering if what I am doing is illegal.

So I invested some money with my friend who plays the stocks game. Every month he sends me the amount we agreed upon. As long as I record this with the IRA and pay taxes on it will it be a legitimate investment?

Actually what you're doing might be illegal. What he is doing could be considered a "hedge fund," in which case you need to be registered as a "accredited investor," which is defined as having a minimum net worth (usually in the millions) or a high income (usually in the mid hundred thousands), in order to invest in his trading activity.

http://www.sec.gov/answers/accred.htm

But on a more realistic note, you probably have nothing to worry about as long as you pay taxes on it, but don't tell uncle sam specifically WHERE you got it from, just that "you got it." Just pay your taxes on it.

The best thing you should do is put your own money in a brokerage account of your own and let him tell you what to trade if you trust this person's advice so much.

I am not an attorney so don't take my advice as gospel btw.

Originally posted by: BigJ
Why are you reporting it to the Irish Republican Army?

ROTFL

Thanks for the heads up. The amount invested and returned every month is no where near millions... not even in the ten thousands....

You perhaps missed my point. If the amount invested is NOT in the millions, it might in fact be illegal.

It is illegal for people with low net worths to invest their money in "hedge funds" (aka unregulated investment pools).

Big brother government wants to keep citizens safe from themselves, so they have made it illegal for average citizens to invest in some of the most profitable investments around.

The ironic part is, such laws are mostly advocated by Democrats, who claim to be protectors of the middle class, and claim to be protecting them from risky investments, but in fact, the best talent and highest returns are found in hedge funds, while most mutual funds (investing for the working class) are run by 8 to 5 wanna-be stock gurus with little talent.

The highest paid mutual fund manager makes about $20 million a year.

The highest paid hedge fund manager (Eddie Lampert) made $1 billion (with a "b") in salary in 2004 alone.

Guess where the talent is going to go?

These sort of laws cheat average folks from getting the best talent managing their money.

But take everything I say with a grain of salt, as I am not a laywer or registered investment advisor.
 

tikwanleap

Senior member
Oct 9, 1999
922
0
0
Originally posted by: JLGatsby
Originally posted by: serialkiller
Originally posted by: JLGatsby
Originally posted by: serialkiller
I was just wondering if what I am doing is illegal.

So I invested some money with my friend who plays the stocks game. Every month he sends me the amount we agreed upon. As long as I record this with the IRA and pay taxes on it will it be a legitimate investment?

Actually what you're doing might be illegal. What he is doing could be considered a "hedge fund," in which case you need to be registered as a "accredited investor," which is defined as having a minimum net worth (usually in the millions) or a high income (usually in the mid hundred thousands), in order to invest in his trading activity.

http://www.sec.gov/answers/accred.htm

But on a more realistic note, you probably have nothing to worry about as long as you pay taxes on it, but don't tell uncle sam specifically WHERE you got it from, just that "you got it." Just pay your taxes on it.

The best thing you should do is put your own money in a brokerage account of your own and let him tell you what to trade if you trust this person's advice so much.

I am not an attorney so don't take my advice as gospel btw.

Originally posted by: BigJ
Why are you reporting it to the Irish Republican Army?

ROTFL

Thanks for the heads up. The amount invested and returned every month is no where near millions... not even in the ten thousands....

You perhaps missed my point. If the amount invested is NOT in the millions, it might in fact be illegal.

It is illegal for people with low net worths to invest their money in "hedge funds" (aka unregulated investment pools).

Big brother government wants to keep citizens safe from themselves, so they have made it illegal for average citizens to invest in some of the most profitable investments around.

The ironic part is, such laws are mostly advocated by Democrats, who claim to be protectors of the middle class, and claim to be protecting them from risky investments, but in fact, the best talent and highest returns are found in hedge funds, while most mutual funds (investing for the working class) are run by 8 to 5 wanna-be stock gurus with little talent.

The highest paid mutual fund manager makes about $20 million a year.

The highest paid hedge fund manager (Eddie Lampert) made $1 billion (with a "b") in salary in 2004 alone.

Guess where the talent is going to go?

These sort of laws cheat average folks from getting the best talent managing their money.

damn! $1 billion?! :Q
 

serialkiller

Golden Member
Dec 9, 2003
1,080
0
0
Originally posted by: tikwanleap
Originally posted by: JLGatsby
Originally posted by: serialkiller
Originally posted by: JLGatsby
Originally posted by: serialkiller
I was just wondering if what I am doing is illegal.

So I invested some money with my friend who plays the stocks game. Every month he sends me the amount we agreed upon. As long as I record this with the IRA and pay taxes on it will it be a legitimate investment?

Actually what you're doing might be illegal. What he is doing could be considered a "hedge fund," in which case you need to be registered as a "accredited investor," which is defined as having a minimum net worth (usually in the millions) or a high income (usually in the mid hundred thousands), in order to invest in his trading activity.

http://www.sec.gov/answers/accred.htm

But on a more realistic note, you probably have nothing to worry about as long as you pay taxes on it, but don't tell uncle sam specifically WHERE you got it from, just that "you got it." Just pay your taxes on it.

The best thing you should do is put your own money in a brokerage account of your own and let him tell you what to trade if you trust this person's advice so much.

I am not an attorney so don't take my advice as gospel btw.

Originally posted by: BigJ
Why are you reporting it to the Irish Republican Army?

ROTFL

Thanks for the heads up. The amount invested and returned every month is no where near millions... not even in the ten thousands....

You perhaps missed my point. If the amount invested is NOT in the millions, it might in fact be illegal.

It is illegal for people with low net worths to invest their money in "hedge funds" (aka unregulated investment pools).

Big brother government wants to keep citizens safe from themselves, so they have made it illegal for average citizens to invest in some of the most profitable investments around.

The ironic part is, such laws are mostly advocated by Democrats, who claim to be protectors of the middle class, and claim to be protecting them from risky investments, but in fact, the best talent and highest returns are found in hedge funds, while most mutual funds (investing for the working class) are run by 8 to 5 wanna-be stock gurus with little talent.

The highest paid mutual fund manager makes about $20 million a year.

The highest paid hedge fund manager (Eddie Lampert) made $1 billion (with a "b") in salary in 2004 alone.

Guess where the talent is going to go?

These sort of laws cheat average folks from getting the best talent managing their money.

damn! $1 billion?! :Q

Oh i see, sorry about the misunderstanding... im glancing here and there while I work so I guess I misunderstood the whole thing about hedge funds... hmm... so how would I know for sure if this is illegal?

 

JLGatsby

Banned
Sep 6, 2005
4,525
0
0
Originally posted by: serialkiller
Originally posted by: tikwanleap
Originally posted by: JLGatsby
Originally posted by: serialkiller
Originally posted by: JLGatsby
Originally posted by: serialkiller
I was just wondering if what I am doing is illegal.

So I invested some money with my friend who plays the stocks game. Every month he sends me the amount we agreed upon. As long as I record this with the IRA and pay taxes on it will it be a legitimate investment?

Actually what you're doing might be illegal. What he is doing could be considered a "hedge fund," in which case you need to be registered as a "accredited investor," which is defined as having a minimum net worth (usually in the millions) or a high income (usually in the mid hundred thousands), in order to invest in his trading activity.

http://www.sec.gov/answers/accred.htm

But on a more realistic note, you probably have nothing to worry about as long as you pay taxes on it, but don't tell uncle sam specifically WHERE you got it from, just that "you got it." Just pay your taxes on it.

The best thing you should do is put your own money in a brokerage account of your own and let him tell you what to trade if you trust this person's advice so much.

I am not an attorney so don't take my advice as gospel btw.

Originally posted by: BigJ
Why are you reporting it to the Irish Republican Army?

ROTFL

Thanks for the heads up. The amount invested and returned every month is no where near millions... not even in the ten thousands....

You perhaps missed my point. If the amount invested is NOT in the millions, it might in fact be illegal.

It is illegal for people with low net worths to invest their money in "hedge funds" (aka unregulated investment pools).

Big brother government wants to keep citizens safe from themselves, so they have made it illegal for average citizens to invest in some of the most profitable investments around.

The ironic part is, such laws are mostly advocated by Democrats, who claim to be protectors of the middle class, and claim to be protecting them from risky investments, but in fact, the best talent and highest returns are found in hedge funds, while most mutual funds (investing for the working class) are run by 8 to 5 wanna-be stock gurus with little talent.

The highest paid mutual fund manager makes about $20 million a year.

The highest paid hedge fund manager (Eddie Lampert) made $1 billion (with a "b") in salary in 2004 alone.

Guess where the talent is going to go?

These sort of laws cheat average folks from getting the best talent managing their money.

damn! $1 billion?! :Q

Oh i see, sorry about the misunderstanding... im glancing here and there while I work so I guess I misunderstood the whole thing about hedge funds... hmm... so how would I know for sure if this is illegal?

*sigh* Talk to a lawyer?

That's the only advice I can give without exposing myself to legal liability. :p

I'm a paranoid fellow.
 

axnff

Senior member
Dec 1, 2000
227
0
0
Something else to consider is that by declaring this as 100% regular income, you're missing out on the tax benefits of long-term capital gains tax (5-15% depending on your tax bracket), assuming, of course, that your friend holds onto stuff long enough for those investments to be considered long-term...