Hello Guest

Racing as a business

  • 29 Replies
  • 2236 Views

0 Members and 1 Guest are viewing this topic.

*

Lowe119

  • ****
  • 456
    +1/-2
    • Midwest Attachments, LLC
Racing as a business
« on: July 28, 2004, 10:00:58 am »
So I know people claim mileage, equipment costs, fuel, hotels, and everything they can as business expenses for their "Bass Fishing Tournament business" and their "Road Racing business." How do we start that up?

Do we have to register our business somewhere? Do we need an EIN? Or do we just claim it on our taxes as "XYZ Racing"?
Like
0
Dislike
0
Agree
0
Disagree
0
No reactions
No reactions
No reactions
No reactions

*

Woofentino Pugrossi

  • *****
  • 4417
    +1627/-388
  • I wike my Pug-maha Mutt-1
Re: Racing as a business
« Reply #1 on: July 28, 2004, 11:02:52 am »
Good question.

My brother wants to stat a business and can you deduct the racing sponsorship as a tax deduction?:D
Like
0
Dislike
0
Agree
0
Disagree
0
No reactions
No reactions
No reactions
No reactions
Rob
CCS MW#14 EX, ASRA #141
CCSForums Cornerworking and Classifieds Mod

*

MELK-MAN

  • ******
  • 1790
    +81/-41
  • ... the dude abides...
    • www.proflowtech.com
Re: Racing as a business
« Reply #2 on: July 28, 2004, 11:58:59 am »
pretty sure you have to form a corporation. The govt. wants to see a profit so you can do this for 3 years i think. I have a corporation already and write off as a bus exp to that corporation, as an advertising exp.
Like
0
Dislike
0
Agree
0
Disagree
0
No reactions
No reactions
No reactions
No reactions
2012 FL region & 2014 South East overall champion
Pro Flow Tech Performance Fuel Injector Service
MICHELIN, EBC, Silkolene, JenningsGP, Engine Ice

*

spyderchick

  • *
  • 5204
    +402/-270
  • Love what you live, and live like you mean it!
    • Spyder Leatherworks
Re: Racing as a business
« Reply #3 on: July 28, 2004, 12:15:54 pm »
You do not have to form a LLC or incorprate. You file a Schedule C for the feds as a sole proprietor. You will have to have documentation for ALL expenses. It is best to start a mileage log for each trip. Save all receipts, etc.

Consult an accountant for how best to document your race business. You will have to actively seek sponsorship, and try to make money. Contigency certs count as money, as do racer discounts.

For each state's tax liabilty, again contact an accountant.

You do have to show a profit after 3 years, better to show a profit after 2. If not, you will no longer be able to show a loss. You are ore likely to be audited, but if all of your paperwork is in order, it won't be a problem.  

If you are in Wisconsin and are looking for a good accountant familiar with racing, let me know and I'll get your her #.  



Like
0
Dislike
0
Agree
0
Disagree
0
No reactions
No reactions
No reactions
No reactions
Alexa Krueger
Spyder Leatherworks
414.327.0967
www.spyderleatherworks.com
www.redflagfund.org
Do or do not, there is no "try".

*

spyderchick

  • *
  • 5204
    +402/-270
  • Love what you live, and live like you mean it!
    • Spyder Leatherworks
Re: Racing as a business
« Reply #4 on: July 28, 2004, 12:17:28 pm »
As Melk-man said, if you already own a business, you can use racing as an advertising tool. Again, documentation is KEY!
Like
0
Dislike
0
Agree
0
Disagree
0
No reactions
No reactions
No reactions
No reactions
Alexa Krueger
Spyder Leatherworks
414.327.0967
www.spyderleatherworks.com
www.redflagfund.org
Do or do not, there is no "try".

*

Lowe119

  • ****
  • 456
    +1/-2
    • Midwest Attachments, LLC
Re: Racing as a business
« Reply #5 on: July 28, 2004, 12:21:51 pm »
I think I am going to talk to my business partner about sponsoring my racing instead of paying dividends........... That looks like it would be the best solution for me.

So if you see my bike with construction equipment graphics on it, you can laugh but there is a good reason for it. Midwest Attachments Racing  8) I already have the brown bike lol  ;D
« Last Edit: July 28, 2004, 12:23:59 pm by Lowe119 »
Like
0
Dislike
0
Agree
0
Disagree
0
No reactions
No reactions
No reactions
No reactions

*

spyderchick

  • *
  • 5204
    +402/-270
  • Love what you live, and live like you mean it!
    • Spyder Leatherworks
Re: Racing as a business
« Reply #6 on: July 28, 2004, 12:26:42 pm »
Who would laugh? Good for you for getting some race ching! :D
Like
0
Dislike
0
Agree
0
Disagree
0
No reactions
No reactions
No reactions
No reactions
Alexa Krueger
Spyder Leatherworks
414.327.0967
www.spyderleatherworks.com
www.redflagfund.org
Do or do not, there is no "try".

*

Lowe119

  • ****
  • 456
    +1/-2
    • Midwest Attachments, LLC
Re: Racing as a business
« Reply #7 on: July 28, 2004, 12:34:59 pm »
I offer "Racer Deals" for anyone who needs an auger or trenching attachment for their skid steer, mini loader, backhoe (auger only), or mini excavator (auger only).   :P  ;) Got to make my advertising money work.
Like
0
Dislike
0
Agree
0
Disagree
0
No reactions
No reactions
No reactions
No reactions

*

H-man

  • ******
  • 1100
    +12/-1
  • Really. My avatar is serious.
Re: Racing as a business
« Reply #8 on: July 28, 2004, 01:00:58 pm »
First I am NOT an expert on this, but I did stay at a Holiday Inn last night and had a dream about this stuff ;D

There is a very good book published by Steve Smith Autosports titled The New Racer's Tax Guide written by Steve Smith.  Lots of answers to racing "business" questions with case histories and more.

Here's the link http://www.ssapubl.com/index.cfm?do=list&categoryid=10

FYI - As Alexa noted, the key thing the IRS looks for is whether you are in this as a legit business (i.e., to make money).  The IRS will expect you to make money in 2 out of 3 years.  They reason that a legit usiness wouldn't continue operation with continuing losses past 3 years.  And enter mostly (if not exclusively) races that offer prize money.  Hard to say your racing is a "business" when most of your races are non purse events.

Also, while many folks (myself included) think of getting a separate business they own to sponsor or advertise their bike, if audited, the IRS will look for (a) similarity of field - how likely is it that likely customers/clients would see the ad at the track (b) evidence that business was actually gained through this method of advertising.

You can claim your expenses as a serious hobby (I forget the form number), but your losses are limited to your earnings.

Good luck & cheers mate,
  H-man

« Last Edit: July 28, 2004, 01:02:09 pm by H-man »
Like
0
Dislike
0
Agree
0
Disagree
0
No reactions
No reactions
No reactions
No reactions
Black Ops Racing
WERA/Fasttrax #42 (N)

"Life has a certain flavor for those who have fought and risked all that the sheltered and protected can never experience."  - John Stuart Mill

*

Lowe119

  • ****
  • 456
    +1/-2
    • Midwest Attachments, LLC
Re: Racing as a business
« Reply #9 on: July 28, 2004, 01:16:34 pm »
Quote

Also, while many folks (myself included) think of getting a separate business they own to sponsor or advertise their bike, if audited, the IRS will look for (a) similarity of field - how likely is it that likely customers/clients would see the ad at the track (b) evidence that business was actually gained through this method of advertising.

I think if I plastered my enclosed trailer (when I get it) with advertising, I could prove that this is being seen by potential customers. I suppose we would have to keep track of where our customers heard about us - especially those who saw the race trailer or bike.....

Quote

You can claim your expenses as a serious hobby (I forget the form number), but your losses are limited to your earnings.  


This is what an accountant told Walter (CCS #301).

Like
0
Dislike
0
Agree
0
Disagree
0
No reactions
No reactions
No reactions
No reactions

*

H-man

  • ******
  • 1100
    +12/-1
  • Really. My avatar is serious.
Re: Racing as a business
« Reply #10 on: July 28, 2004, 01:34:26 pm »
Quote

I think if I plastered my enclosed trailer (when I get it) with advertising, I could prove that this is being seen by potential customers. I suppose we would have to keep track of where our customers heard about us - especially those who saw the race trailer or bike.....


Exactly, start keeping track of how new customers heard about you.  A little pencil whipping could easily have your trailer as your 2nd or 3rd best source of new customers (not that I'm advising that mind you  :-X ;))

Price out what a billboard or full page ad in a local, large circulation publication and make your advertising expense appropriately match that.
« Last Edit: July 28, 2004, 01:35:36 pm by H-man »
Like
0
Dislike
0
Agree
0
Disagree
0
No reactions
No reactions
No reactions
No reactions
Black Ops Racing
WERA/Fasttrax #42 (N)

"Life has a certain flavor for those who have fought and risked all that the sheltered and protected can never experience."  - John Stuart Mill

*

Chuck

Re: Racing as a business
« Reply #11 on: July 28, 2004, 02:10:50 pm »
I started an S-Corporation for my Rep Firm, and I use Racing as a "Marketing Expense".  According to my tax attorny I can spend as much as I like on "Marketing"  ;)
Like
0
Dislike
0
Agree
0
Disagree
0
No reactions
No reactions
No reactions
No reactions