CLASS RACER FORUM - How to deduct winnings/expenses on taxes?

Quote:

Originally Posted by mtkawboy (Post 160837)

Isnt there a limit to how long you can run it as a business and not make a profit ? Writing off racing is an "Audit me " red flag to the IRS

No, there is no limit. Again, your actions and the IRS perception of those factor into their decision. For example, if you have lost money but can show what business changes you have made to reduce expenses, increase earnings, etc. and that those are working (even if slowly) then that establishes you are in a for-profit activity. It takes some businesses many years to turn a profit, so showing a loss for a few years isn't necessarily going to cause your activity to be disallowed. But, continuing to lose money, with no hopes of it ever being profitable will.