class racing as a business?

Thanks guys for the advice. Of course we race for fun and will continue to do so. We were just making conversation on our way back from Dallas tonight after we went up to pick out our new motorhome. The thought was hey, we spend all this money to race (and enjoy it and will continue to) I wonder if we are missing out on a tax opportunity. If not, so be it. We look forward to meeting new people and making new friends.

[Bobby Brannon]

John Brimer (A/SA) Julie Jordan both are CPA they are on this forum. Ask them. John is my CPA

[CMcAllister]

Years ago, we were audited and were successful in defending our racing expense deductions. However, we had a shop that was about 75% racing and was our sole means of support. The race car was used for R&D, advertising at the races and we also were soliciting sponsors for a revenue stream as well as trying to win money at races that paid well.

Start a race related business or one that depends on racing for customers.

Talk to a tax person familiar with racing. With the government that we have now, I would not invite the man into my life by trying to claim anything that's not a legit business that exists to make money.

[SStockDart]

I can't resist........If you are a conservative, don't let the IRS know or you will be audited for sure.

[Tom Goldman]

Originally Posted by SStockDart

Well.......you won a couple.......am I way off? The last time I figured contingency for Super Stock, it would have been around $25,000 per event. That was several years ago and I know it is significantly less now, but figured around $17,500. Please correct me.

National events pay nowhere near what they used to .
In '96 I made $13,000 for a r/u at Virginia , in '08 I made $8,000 for a r/u at Maple Grove.
This years win at Englishtown will only be worth about $11,000.
I am finding that the checks are coming a little slower than in the past ,but I've already recieved more than half of the checks .
I might have made about $1200 more ,if I played the decal game to the fullest, but I didn't, so my loss.
I'm finding it very hard to keep more than 30 legitimate decals on the car.
As far as the original question, keep detailed records of all your expenses for every race. ....You can legitamately deduct reasonable travel ,food , entry, membership and other expenses , such as race fuel incured at the event you recieved winnings from.
You should also be able to deduct interest paid on your motorhome loan since it can be considered a second home.

[Dan Fahey]

Hey Scott:

It would be a lot easier if you already had a profitable business.
I had a racing business in the 80's and won a good bit of money but more losses which reduced my taxes, a lot !
But the laws killed off a lot of public deductions such as interest on all loans.

Today my company DanSources sponsors my car and use the advertising deduction as key tool.
Since I also Referee Soccer those earnings are reported too.

The IRS does look for people abusing the system.
When caught you can see them whine and cry about it.

The IRS will allow you to deduct against what you won and avoid paying taxes on the earnings.
If you are out for blood they will visit you.

Got audited 3 times 1983, 1984, and 1990, twice in 2002 and 2004.
The last two were very thorough but each were done in a day.
2002 ended up getting a small refund.

If you do it with the intent to stay honest, keep good records there will be few problems even during an audit.

Be Square Play Fair.

Dan

[jim powers]

don't forget one important item, if you are doing this as a business the dot will require you to have a cdl if you are over 10,000 lbs. and we all are obviously, as far as the coach, i believe you can get a home type mortgage for a new one and enjoy the same interest deductions as your home......JULIE? JULIE??

[bigshow2966]

A few years ago my accountant set my racing up as a business. At that time you had to show profit 1 year out of 5. As said before, keep really good records and keep it legit.

A good accountant is your friend.

[Dan Fahey]

Read something on a past post

In some states the State Troopers will pull you over and ask if you are operating as a business or just for sport, and if you won any money.

Hope this is not true.

D

[Terry Cain]

There's a guy who advertises news letters and such, Ernie Saxton. I'm not sure if it's worth it or not (never used his services). Maybe someone else can comment? He has a web site.