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system
s corp with straddles income
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if this activity were to generate let's say 100k of profit, and the   other corporate activities also generate 100k of revenue, are there   any issues tax-wise i need to be concerned about? yes. having 25% or more of passive income in 3 consecutive years will invalidate your s-corp status and you'll revert to c-corp. can i deduct normal business expenses from the straddles (which are   taxed as short term capital gains) profit? i don't believe you can. you can deduct investment expenses from the investment income. on your individual tax return it will balance out, but you cannot mix types of income/expense on the corporate return or k-1.
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