Does any one use their racing as a tax right off? I baught a car, parts RV, fuel, motel, entry fees etc. If you do how legally can you do it?

Brian

yep claim it loose many 3 years........pay it all back in a audit

Don't try it, You'll get audited.

Maybe if you set you "racing team" up as an LLC or something, but then have to claim winnings as profit too

If you do it right, you can do it.

You MUST run it like a business.

I raced motorcycles for years. Yeah I got audited, big fricken deal. I also NEVER got hit with any "adjustments" because it was done right.

Years ago, I was able to claim a little in advertising with my shop name on my car. You have to have a license business to do it, and it isn't much in return, but every little bit helped. I did have ab accountant and book keeper. Keep every reciept on file that you spend, and when and where you spent it. As I said, it was for advertising only to get my shop name out there. You only get a small percentage back.

It can be done, but you must prove to the auditor that you are trying to make a profit. If you are a hobby racer and happen to win a lot, you can deduct your expenses from your winnings, just like gambling.

I've always claimed it as a business but I keep track of everything; Mileage, entry fees, parts, every thing. I print account records for every year and keep every receipt. Now that doesn't mean I go crazy writing off every little thing. I usually claim just enough to offset the winnings for that year. Some years I even make a small profit. Of course I took a beating this year. I could barely win a dang round let alone races...lol.

I payed a tax accountant good money to setup my racing buisness.

He did and i wrote off thousands of dollars.

I also depreciated the car and race stuff.

I got back what i payed in, thats it.

After i was done paying him, i got a couple hundred bucks.

If you make over 6 figures a year it might be beneficial.

I wrote the racing and the part time engine building side business( Cabs Automotive) off for a lot of years (I worked full time for one of the bigger phone companys in CA and worked a lot of O.T. ) before my tax guy(former IRS employee)informed me that because I hadn't made a profit in over seven years I MIGHT get audited. The business made a profit the next year I did slow down on the racing and we( I partnered up with another racer on a S/ST car) also won a lot more money that year including winning the bracket finals in division 7 that year and I did build a lot more motors the next three years I have never been audited, keep records of everything spent, date, times and events as well as all income I do know three NHRA stock world Champs that got audited the year after they won the champonship, none of them where fined or penalized by the IRS when it was all done and said. One of them was audited and told the year before he won the championship that couldn't write the racing off any more because the IRS auditer thought it was a hobby, not a business He also was a CA goverment employee Once he won over $48000.00 the next year he was allowed to back file and claim the racing as a businees for several more years

Yes, I wrote it off as a hobby expense. I did it for six years and never got audited.

I claimed racing when I was just running a street car.

Get a GOOD tax accountant.

H&R Block is not your friend.

Don't try to be greedy or stupid.

Keep records of everything.

Don't be greedy or stupid.

All I know is that.. I asked my book keeper about it years ago and he told that for it to be legal, at some point you have to show a profit as in.... business.

Everyone I personally know that had a bad audit after doing this had one thing in common.

They were not honest about winnings and products they sold.

I handle my racing and repair work as a business. I use it to offset some of the taxable income I have from my job. Done this for years. An IRS auditer may find something they don't like but, as far as I know with all the info I have a a well qualified tax preparer helping me we are legit. I win a $20 and I report it. Most people would not. The tracks make you fill out a 1099 because they know people are not honest. I sell so much as a bolt out of the bolt bin and it will get local and state sales tax and be reported as goods sold from inventory. It is a brutal pita every year at tax time but, we have done it for years.

Leon

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The tracks make you fill out a 1099 because they know people are not honest.

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No, the tracks 1099 you because they too are running it as a business.

I just write off the expenses up to the point I can cover my 1099s each year and be done with it.

So I don't have to pay any taxes on the income.