JimmyKash

</font><blockquote><font size="1" face="Verdana, Helvetica, sans-serif">quote:</font><hr /><font size="2" face="Verdana, Helvetica, sans-serif">Originally posted by Brady_96Z:
<strong>

That's fine and dandy, you won't have to pay any more taxes because of racing. But, I was looking to claim these expenses over and above what little I won while racing. </strong></font><hr /></blockquote><font size="2" face="Verdana, Helvetica, sans-serif">look at the post below about the 2% rule...


</font><blockquote><font size="1" face="Verdana, Helvetica, sans-serif">quote:</font><hr /><font size="2" face="Verdana, Helvetica, sans-serif">Back to what you were saying about spending $10,000.

I spent $10,000, won $500, so I could claim $3,000 loss this year. Next year I spend $3000, win nothing, but I can still claim $3,000 loss. In '04 I spend $3,000 but win $1,000, can I claim a loss? How long before I have to claim winnings that exceed my expenses?

</font><hr /></blockquote><font size="2" face="Verdana, Helvetica, sans-serif">I dont feel i have the knowledge or qualifications to answer your question. You have to be setup as owing in a business and *i think* you have to be incorporated. I'm not very sure about it, talke to a competent CPA and he could explain more.

JimmyKash

here are a few helpful links:

Miscellaneous Deductions
http://www.irs.gov/individuals/page/...D14288,00.html

Miscellaneous Deductions

http://www.irs.gov/pub/irs-pdf/p529.pdf
(read page 8 and page 9)

Business or Hobby?

http://www.irs.gov/businesses/small/...=99239,00.html

Chapter 1 Publication 535 (adobe file)
http://www.irs.gov/pub/irs-pdf/p535.pdf
(read page 5 for non-for-profit information regarding hobbies and expenses)
"For details about not-for-profit activities, refer to Chapter 1 in Publication 535, Business Expenses (PDF). The chapter explains how to determine whether your activity is carried on to make a profit and how to figure the amount of loss you can deduct. For further information on the status of your business you may also consider the sources provided in our Tax Assistance page." irs.gov

---Ok, if you are lazy and dont read any of the links...this is my take on it:

GO BRACKET RACING AND WIN SOME FREAKN' MONEY. <img border="0" title="" alt="[Smile]" src="gr_stretch.gif" />
It says in there that as long as what you are doing qualifies as a non-for-profit type of business and/or hobby, you generally can deduct expenses up to the amount you actually win...otherwise you are limited to 2% of your gross income (but there are rules on this too depending on how much you make in a year)

So lets take 2 examples:

a)60,000 gross income
$200 in bracket winnings
5,000 in hobby expenses (all receipts)

2% of 60,000 is $1200, so you get to deduct $1200 even though you won $200. Dont list the $200 as additional income, just do the standard 2% rule and be happy with the deduction

b)60,000 gross income
3,000 in bracket winnings
5,000 in hobby expenses (all receipts)

again 2% of 60,000 is $1200. But if i read the above links correctly, it says you can generally deduct expenses up to what you've won for the year. So instead of only be able to deduct the standard 2% ($1200) you get to deduct $3,000 because your hobby expenses exceed your winnings, so you take UP TO what you won; $3000 deductions.

---Lastly, i'm no CPA, just a good researcher and student <img border="0" title="" alt="[Wink]" src="gr_images/icons/wink.gif" /> . Read the links, consult your CPA and ask questions. If i understand the above links correctly and you can prove that you are not operating as a business (which is fairly easy) you can deduct up to your winnings because you are non-for-profit.

Hope some of this helped <img border="0" title="" alt="[Smile]" src="gr_stretch.gif" />

<small>[ February 01, 2003, 04:10 AM: Message edited by: JimmyKash ]</small>