tax time

From famous pros to weekend warriors, our friendly members will help answer your tech questions.
gary b
Posts: 54
Joined: Sun Apr 16, 2006 10:07 am

tax time

Postby gary b » Tue Feb 26, 2008 7:52 pm

not your normal tech but when does your hobby (racing) become a busieness tired of pay taxes on winnings and having no deductions. just venting steam. but there has to be a definition out there but no one can tell me what it is not even the irs. if your not a million dollar team its not a business thanks broke dad

User avatar
draglist
Site Admin
Posts: 13676
Joined: Wed Feb 22, 2006 7:23 pm
Location: Waldorf MD
Contact:

Postby draglist » Tue Feb 26, 2008 11:26 pm

I'm not a tax expert, but I did discuss this type of thing when I was first setting up the two corporations I've owned (including the current Bilden Enterprises, Inc., which is the umbrella organization for Draglist and other stuff).

What the IRS is going to look at is whether you have a reasonable expectation of making a profit in any business. So there are a few ways to go with this. High dollar bracket racers may be able to make the case based on the potential returns they can earn. Same with pro racers.

Using your car as an advertising medium and attempting to set it up as a business for that reason may work. I don't know for sure, but I'm guessing that many of the top dollar alcohol cars out there and other sportsman cars that have their owners' business names on the sides are probably writing off some of their expenses as advertising costs.

There are one or two books I've seen over the years about the tax implications of race cars, but I can't point you to one right now.

Good luck with this... bp
Bill Pratt
Draglist.com - Crowdsourced drag racing history.
Find and edit our listings for your favorite racers!
http://www.draglist.com/draglist/search.php

User avatar
pro70z28
Posts: 11489
Joined: Fri Feb 24, 2006 12:17 pm

Postby pro70z28 » Tue Feb 26, 2008 11:29 pm

I did some lettering on a car in town here 2-3 years ago and I remember him talking about setting his car up as a business. I don't remember how he went about it, but he is just a low dollar part time bracket racer.
15th Annual DRAGLIST Nationals Sometime in 2020. Somewhere in the USA.

gary b
Posts: 54
Joined: Sun Apr 16, 2006 10:07 am

tax

Postby gary b » Wed Feb 27, 2008 7:16 am

after doing some reserch i asume that most people are so woried over a audit that they don't take the deductions. under the federeal tax regulation hobby versus small buisness our braket racing shouild be a small buisness. tax regulation 1.183-2 now my high school education is going to prove me wrong. but there should be some racers out there that have already been thru it that can tell us there exsperiance. thanks gary b

User avatar
go300mph
Posts: 23
Joined: Mon Apr 07, 2008 9:32 pm
Location: Omaha
Contact:

Deducting a hobby ?!?!??!?!?

Postby go300mph » Wed Apr 09, 2008 12:18 pm

I have spent many hours on this very subject, I unfortunately have spent more hours sniffing kerosene so the mind is a little fuzzy. if you are serious PM me and i will tell you a mans name and number who used to be an IRS Auditor who specialized in fraudulant deductions and you can pay him (as he is now a consultant working on our side) and hear it from his point of veiw. I asked my a full time attorney and CPA as well as this Ex-IRS man , they all tell me the same :wink: thing. If you can prove your rocket powrered funny car or Nitro burning luge is a business with the expectation to earn a profit, board meetings with minutes, receipts etc. all the stuff you would expect to see in any legit business, then you are "not for Hobby" the 'hobby clause" states "resonable expetation", which defined means "gray area" p*ss the auditor off and the gray area bends his way, see what i mean. As for audits , the IRS is out numbered and I bet they don't chase nickels, so as a gambling man I bend the gray area my way, "BUT" and I qualify this entire posting with a "BUT" I dont' have cable tv and the federal prision system does.
Always Snug up the 'ol Anti-Submarine belt

User avatar
jim sanders
Posts: 8740
Joined: Fri Feb 24, 2006 8:54 am
Location: St.Louis Mo.
Contact:

Postby jim sanders » Wed Apr 09, 2008 1:06 pm

:lol: i have also delt with the IRS 3Times :P
GOOD TO GO !!
Uncle Curt Wasson album
[url=http://www.glowfoto.com/users2/gatorgumbo][img]http://www.glowfoto.com/siteimages/linktogallery.gif[/img][/url]

User avatar
go300mph
Posts: 23
Joined: Mon Apr 07, 2008 9:32 pm
Location: Omaha
Contact:

delt w. irs 3x

Postby go300mph » Wed Apr 09, 2008 3:54 pm

was it about the race car ? what was said? what was the out come? please expound.
mick
Always Snug up the 'ol Anti-Submarine belt


Return to “Tech Questions”

Who is online

Users browsing this forum: No registered users and 2 guests

cron