“Dear Steve,
Help!
I have an LLC that was a trading firm on Wall Street. At the end, we had significant negative equity in the LLC. (Owed to our clearing agent) If we close the LLC, what happens to that loss? Is it considered forgiven debt? Where can I corroborate that in the tax code?
Michael”
The Answer:
Dear Michael,
As much as I appreciate the opportunity to assist you, dude, seriously, you need specific legal advice and not free advice from some guy on the web. You are playing in the big leagues and with obligations and companies that have big legal teams and don’t like to take prisoners.
If you owe an established clearing agent and others, closing the LLC may not shield you from personal liability. In order to clear the business debts you may need to consider a business bankruptcy before the business closes.
As for LLC tax advice, talk to your accountant from the trading company you owned. I’m sure you had one.
Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.
P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.
If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.