Racing write off's

talkjk

Well-Known Member
Will it may be to late for this year, but what are some of the creative ways to write off your racing habit?
 

dezertgirl

"RDC's Social Butterfly"
Well if you have winnings to claim... you can offset some of your extra income by writing off the pit team that you pay for hotels, meals, advertising expenses for team shirts or uniforms.

In order to do this though you would have to have your race team set up more like a small business though :D
 

talkjk

Well-Known Member
Can you invets in your race team with $ from your other company and write it off?
 

<Cody Agee>

Whippersnapper!
you can use your company such as joe's construction as your advertiser for your car and write it off as a marketing expense
 

Random Thoughts Racing

Well-Known Member
Uniforms, unreembursed travel expenses, advertisement etc. Of course consult your tax advisor.
 

BANNED4LIFE

Well-Known Member
you can use your company such as joe's construction as your advertiser for your car and write it off as a marketing expense
hahahahahhaha..............dont give too much advise if you have absolutely no idea what your talking about............just some friendly advise...................
 

Jeepspeedster

Well-Known Member
Be careful, IRS has developed a training class for their auditors just to look for such racing expense (lost). Trust me, gone thru tax audit twice.

Case one: If you own a business, why didn't you sponsor others pro teams to run your company logo, sponsoring yourself makes it a hobby
Case two: Need to show, how your XYZ type business benefits from an off-road racing in BAJA?
Case three: Can't support your racing hobby with your actual full time job's income and expect IRS to give you a tax discount.

end up Paying the man with 25% penalty and 10% interest. Not good.

Need a good CPA and Law man to help you fight the case, and these guys are not cheap. Deduct upto your winning $$ no more.
 

TauMau

Well-Known Member
We're in the business of racing in an attempt to make a profit from sponsors, payouts, etc...just like the guys that do it running in circles...it may not be a very good one, but none the less..
 

dezertgirl

"RDC's Social Butterfly"
Can you invets in your race team with $ from your other company and write it off?
You can... just don't write things off in excess and SAVE receipts and documentation proving what you are writing off!

Be careful, IRS has developed a training class for their auditors just to look for such racing expense (lost). Trust me, gone thru tax audit twice.

Case one: If you own a business, why didn't you sponsor others pro teams to run your company logo, sponsoring yourself makes it a hobby
Case two: Need to show, how your XYZ type business benefits from an off-road racing in BAJA?
Case three: Can't support your racing hobby with your actual full time job's income and expect IRS to give you a tax discount.

end up Paying the man with 25% penalty and 10% interest. Not good.

Need a good CPA and Law man to help you fight the case, and these guys are not cheap. Deduct upto your winning $$ no more.
VERY true!! I have taken taxation classes and do accounting for a living... you have to be wise and at least MOSTLY honest with your write offs or else it will be a serious pain in the butt later on!!
 

LENNY

Well-Known Member
I dont race,What are you talking about.Man my work truck went threw a lot of trannys this year and they sure dont make tires like they use to.
 

talkjk

Well-Known Member
I dont race,What are you talking about.Man my work truck went threw a lot of trannys this year and they sure dont make tires like they use to.
LOL, ya we ad to re plumb one of our trucks, and as you now the fast truck on the road is a company truck, so we had to up grade the brakes:)
 

Jorge Rodriguez

50% tortoise 50% hare
one of my uncle's owns a welding factory and you would be surprised that you can just about write off a complete race car...

King Shocks = Hydraulic Pistons

Jimenez Race Engine = motor to power hydraulic pumps

etc..............
 

Brandt_Anderson

"Rag Doll"
From the IRS website:

Business or Hobby? Answer Has Tax Implications

IRS Summertime Tax Tip 2008-12

Fishing, Gardening, Golf, Sewing, Woodworking, Horsemanship, Scrap Booking, Stamp and Coin Collecting. Millions of Americans participate in activities for pleasure that can also result in a profit.

The IRS isn’t trying to spoil your fun but if your favorite activity makes a profit every year or so, there may be tax implications that surprise you. For one thing, you must report and pay tax on income from almost all sources, including hobbies.

What is a hobby? Hobbies, also called not-for-profit activities, are those activities that are not pursued for profit. What is a business? Generally, your activity is considered a business if it is carried on with the reasonable expectation of earning a profit.

If you are not sure whether you are running a business or simply enjoying a hobby, here are some of the factors you should consider:

Does the time and effort put into the activity indicate an intention to make a profit?
Do you depend on income from the activity?
If there are losses, are they due to circumstances beyond your control or did they occur in he start-up phase of the business?
Have you changed methods of operation to improve profitability.
Do you have the knowledge needed to carry on the activity as a successful business?
Have you made a profit in similar activities in the past?
Does the activity make a profit in some years?
Do you expect to make a profit in the future from the appreciation of assets used in the activity?
An activity is presumed carried on for profit if it makes a profit in at least three of the last five tax years, including the current year (or at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses).

If your activity is not carried on for profit, allowable deductions cannot exceed the gross receipts for the activity.

Deductions for hobby activities are claimed as itemized deductions on Schedule A, Form 1040. These deductions must be taken in the following order and only to the extent stated in each of three categories:

Deductions that a taxpayer may claim for certain personal expenses, such as home mortgage interest and taxes, may be taken in full.
Deductions that don’t result in an adjustment to the basis of property, such as advertising, insurance premiums and wages, may be taken next, to the extent gross income for the activity is more than the deductions from the first category.
Deductions that reduce the basis of property, such as depreciation and amortization, are taken last, but only to the extent gross income for the activity is more than the deductions taken in the first two categories.
If you are conducting a trade or business you may deduct your ordinary and necessary expenses. An ordinary expense is an expense that is common and accepted in your trade or business. A necessary expense is one that is appropriate for your business.
 

SpeedSceneLiveTV

Well-Known Member
You need to run your racing like a business. You must have income from racing, and if you dont make much from winning you need sponsors. Also, you need a business name (with a DBA) and a business bank account.
Dont think you can pull off writing a bunch of stuff off if you are not jumping thru all the hoops.
 

jsallenbach

Well-Known Member
Tell your doctor you have anger problems and need to relaxe. So you buy a car and tell them it makes you relaxed and its for medical reasons Like you do with a pool for physical theropy.
 

Uncle_Bob

Well-Known Member
Don't forget to add all your contingency winnings as income.
 

Shannon

Bear on a Unicycle
Big Brother is always watching,I'm not touching this with a 10ft. pole!!!!
 

Gadzooks2

Well-Known Member
If you don't have a business, I don't think you can write off racing expenses unless of course you show a profit at some point. If you do own a business, I don't think the IRS could differentiate between purchasing advertising space on a freeway billboard which is 100% deductible and purchasing billboard space on a race car. How effective advertising is has no bearing on weather it is deductible or not.
I'm sure the advertising spent by corporations on Nascar racing is deductible, Off road shoud be no different?
 

randy68

#1 Enemy of Google
My "guy" always tell me I can be a lion, or a mouse, as far as the IRS goes.

Butt, you gotta remember, "a pig gets fat, a hog gets slaughtered!"
 
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