zspot98

iTrader: (87)

Has anyone on here established a small business for there car? I am looking at setting up something to where I create a company that is designed for racing the car specificlly. Deducting things like up-keep, trailer, truck, and all other general speed repairs. Just looking for any input or tips from folks that have already done this or researched it. Thanks in advance for the replies.

ss1129

iTrader: (16)

badass 2002 z28

iTrader: (5)

i know you can declair racing as a business for taxes and write off pretty much everything..as long as you prove that you "were trying to make a profit". I know a few guys here that do it every year..

zspot98

iTrader: (87)

Badass 2002 z28-that's what I'm trying to do, my wife is an accountant and she's the one who brought it up to me. I'm just looking for some folks that have done it and see if they have any advice.

Shon Herron

iTrader: (25)

I am doing it, it's pretty cool....

ss1129

iTrader: (16)

Care to share how you got started and how your doing?

Shon Herron

iTrader: (25)

There are several ways.

I wanted to get into sales/install/etc so I got a business license.

There is a form that you file with your tax return. I dont recall the number but any accountant (LOL, that is what I do for a real job) can tell you the form number or a simple search on IRS.gov for small business will pull up the form.

MrDude_1

iTrader: (4)

hmm... im going to start looking into this idea for next year.

with all the crap i do, that should help ALOT!

1fastWS6

iTrader: (3)

Technically you can't claim that its a business unless you have a reasonable amount of income associated with it. You *should* be ok however as long as you don't go many years w/o showing a profit. If you deduct expenses and show a net loss for too many years in a row (I've heard 5 yrs) it will flag the IRS and you'll be busted. There's a fine line between racing as a *business* and a *hobby*. Find a good tax accountant that knows all the in's and out's to keep you out of trouble.

I'm no expert, but this is all what I've learned from my tax person over the past couple years.

ty_ty13

iTrader: (42)

i'm doing it on one of my cars... the 69 camaro...

the car you have the deduction on and racing expenses on cannot be a street driven car... if they find that you do you will be busted.

1fastWS6

iTrader: (3)

what diff. would street driven make? mine's not, but I can't see how it'd make a difference other than if it was a daily driver....now that would be a diff. story.

ty_ty13

iTrader: (42)

cause its not considered a race car

1QuickT-A

iTrader: (12)

I think it would be ok if you drove it short distances to the race track or to car shows for promotional purposes... It would show that you are using the car/truck to promote your parts/mechanic services since you can race and drive the car on the street without any mechanical problems..

ty_ty13

iTrader: (42)

thats just what i was told by my accountant/financial advisor.... so i'll just stick with him..

Chopstix

iTrader: (1)

I was told you can only deduct what you realisticly could expect to win

I.e you enter 3 sanctioned race with 500 1st place prizes...$1500 deduction

SilverGhost

iTrader: (53)

my accountant mentioned this idea when i was getting my taxes done. he told me i'd need to be competing for money tho, like bracket racing or a series, etc, can't just be a hobby. i dunno he didn't elaborate all that much.

i know a few guys on here that bracket race alot have ended up recieving a W2 from the track for their winnings and had to figure that into taxes.

1fastWS6

iTrader: (3)

Yeah.....you can't just run TNT nights all year. Weekly bracket races, local NHRA, PRO events, etc where you can win $$$. Also, where there's travel involved to these races you can also deduct gas, mileage, meals, motel, etc as long as you keep receipts and good records.

The car can be considered a marketing tool at shows etc to get business and as a tool to win money at races.

98 Silver Bullet

iTrader: (28)

I'm doing the same thing. You can't claim a loss any more than three years. It helps to show some income for those first three years. If you have sold parts, that is income.

Villain281H

iTrader: (5)

I've been keeping a sep. C form on my bracket racing since 1999, and it's on my street car. I don't think the car matters, but as mentioned above, don't show losses for more than 3-4 years, or you are asking for an IRS knock at the door! It helps to offset the money the track reports I win to show the $$$ spent on parts, towing, gas, hotels, and such.

Bummer as much as I love racing, doing the taxes just reminds me how much I spent on this "hobby" and only 1 year did I come very close to pulling even, and I made $6,000 that year!

Derek

Coach 02 A3 Z/28

iTrader: (10)

I had 4 different W2's this past year. It did make a difference on my 2006 taxes.

Coach