While talking to some fellow racers at work the other day about taxes, the subject of deducting racing expenses came up. I myself have no desire to see an IRS dude invading any of my body cavities if you know what I mean. But I am curious how this is done legally while claiming it is a business. What are the pros and cons of this and how many ways are you opening yourself up for trouble.
The guy who is currently claiming his expenses has a small business painting/repairing cars, where his racing funds are generated. But another one is saying you can do the same thing by saving all your receipts and claiming them as your business costs because you "intend" on winning money. Problem I see is if you do not have an income from the business to support the racing costs, you are not using the businesses money for racing you are using your personal money. Wouldn't that just be the same as claiming the costs of a hobby?
So can anyone give me FIRST HAND information? Not the, my mom's sister's husband's uncle's freinds did this in the 70's, stories. Pros and cons, because I am sure there are some strict rules around this. Also, what does this open you up to while towing? Both of these guys tow with motorhomes if that matters.
Thanks, Beep