I've given this some thought myself...
I have a side business that I do and I basically use
most of the money I earn from that to pay for
autocross and track stuff. I thought about setting up
a second business for racing. The income for that
business would be made by getting sponsorship dollars.
Most of which would come from my other business. The
money the other business gives to the racing business
would be accounted for as advertising dollars, as they
are sponsoring the car and the car would display the
name of the business. The racing business' expenses
would be all of those things that you pay for when
racing. The only thing I've been warned of is that if
the advertising expense of the first business seemed
inordinately high as a percentage of income that would
throw a red flag for the IRS and they would not be
happy with that. Additionally they may look upon the
racing business as just a hobby if you didn't ever
really make any income from it. In other words, unless
you make enough to pay some taxes they would more than
likely call that racing business a hobby. So they
thing is you could get away with this plan to a point
but you can't get out of paying taxes completely. I
imagine as long as the racing business showed some net
income and the other business showed some as well it
would probably be ok. I'm looking at doing this for
more than just paying for racing but to find some
legal way to "hide" my extra income that I end up
spending on racing anyway.
Disclaimer: I am not recommending anyone do this and I
haven't done it yet myelf. It's just a thought I'm
throwing out there hoping to get some thoughts from
you folks on this.
Thanks for bringing this up Carl!
--- Carl Merritt <CMerritt@luminous.com> wrote:
> If I recall correctly, it only helps to offset any
> profit you make from your
> hobby...
>
> -Carl
>
>
> > -----Original Message-----
> > From: Arie Villasol [mailto:autoxin@yahoo.com]
> > Sent: Thursday, April 11, 2002 10:19 AM
> > To: ba-autox@autox.team.net
> > Subject: Hobby tax deductions.....
> >
> >
> > Does anyone have any experience with expensing
> AutoX
> > related expenses on your income tax?
> >
> > I'm trying to figure out if it is possible. I
> thought
> > I'd ask because I know someone has probably
> already
> > explored this route at one point in there AutoX
> > careers.
> >
> > If anyone has any advice on this, legal or
> otherwise,
> > please respond to me directly.
> >
> > Thanks in advance!
> > Arie Villasol
> > Yahoo! Tax Center - online filing with TurboTax
> > http://taxes.yahoo.com/
Yahoo! Tax Center - online filing with TurboTax
http://taxes.yahoo.com/
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