Racing as a business?

TQ29m · 12/14/11, 12:51 PM

I've talked to various attorney's, and CPA's over th years, and their advice to me, was "If it walks like a Duck, Quacks like a Duck, it'd better be a Duck", and that's from the attorney that settled the case with Dow Corning, over breast implants! Just sayin! Bob!

kcarm92 · 12/14/11, 1:15 PM

our insurance agent tells us if we claim it as a bussiness or not we can not get coverage on racecars or parts as far has fires you can set a amout on coverage on content but that aplys to tools ,welders ,etc but not racecars,or engines, also found out if car is in trailer and trailer is stolen, trailer is covered but not car or contents,thats from two different carriers,and yes if you run it as a bussiness, you must show profit every 5 yrs. what our tax people say

Speedwrench · 12/14/11, 1:30 PM

Can guarantee from experience that if the car or parts are stolen from your shop/home garage that your homeowners guy wil tell you that you are SOL.

be forewarned.

spankytoo · 12/14/11, 5:51 PM

The tax ID is for one reason. If you plan on selling items the state you live in wants their share and this is what they track you with. In Indiana you can use this tax ID to purchase race cars, engines and parts for the car and not pay sales tax if the ID is registered as a race team. Tires and accessories are not included. Basically if it bolts on the race car you do not have to pay sales tax on it. The tax ID is with the state. Your county is where you have to register a DBA (Doing Business As). You do not have to have a tax ID to have a business unless you plan on resale. As someone stated: If you receive a 1099 you have to report it. You will not receive one unless you make $600 or more from any one business. IE: USAC will give you one and Kokomo will give you another. Each one has to be more than $600 to recieve a 1099. If you don't get one you are not obligated to report it. Too small to worry about for the IRS. Now the big question. Can I deduct the expenses that makes me report this 1099, or is this just a hobby? Yes but, if you get audited You have to prove that you were trying to make a profit. So sell t-shirts and claim that income (tax ID required) sell decals etc. Do you have to make a profit every 5 years? No, but the odds of you getting audited goes up dramatically. So you better have your ducks in a row as they say.

DAD · 12/15/11, 11:54 AM

A wise man once told me that you should never allocate more than 10% of your business gross into advertising unless the advertising is going to be on a race car. Advertising at races, in race programs, racers boards and even on race cars is a good way to get your name out there in front of the public.

s.chrisman25 · 12/15/11, 2:29 PM

i have speed shop an famr my shop never burned up i have money come in and do work on tractor and all race cars even irs know my stuff best an fastest yep

throb · 12/15/11, 3:46 PM

does anyone else have trouble understanding this guys ^^^^^^^^
posts????

TQ29m · 12/15/11, 5:46 PM

I'm thinkin chain yanker!!!!Bob!

12/14/11, 12:51 PM	#11 Re: Racing as a business?
TQ29m Senior Member Join Date: Aug 2008 Posts: 6,246	I've talked to various attorney's, and CPA's over th years, and their advice to me, was "If it walks like a Duck, Quacks like a Duck, it'd better be a Duck", and that's from the attorney that settled the case with Dow Corning, over breast implants! Just sayin! Bob! __________________ "Being old, isn't half as much fun, as getting there"! Ole Robert I!

12/14/11, 5:51 PM	#14 Re: Racing as a business?
spankytoo Senior Member Race Count This Year: 22 Join Date: Mar 2009 Posts: 305	The tax ID is for one reason. If you plan on selling items the state you live in wants their share and this is what they track you with. In Indiana you can use this tax ID to purchase race cars, engines and parts for the car and not pay sales tax if the ID is registered as a race team. Tires and accessories are not included. Basically if it bolts on the race car you do not have to pay sales tax on it. The tax ID is with the state. Your county is where you have to register a DBA (Doing Business As). You do not have to have a tax ID to have a business unless you plan on resale. As someone stated: If you receive a 1099 you have to report it. You will not receive one unless you make $600 or more from any one business. IE: USAC will give you one and Kokomo will give you another. Each one has to be more than $600 to recieve a 1099. If you don't get one you are not obligated to report it. Too small to worry about for the IRS. Now the big question. Can I deduct the expenses that makes me report this 1099, or is this just a hobby? Yes but, if you get audited You have to prove that you were trying to make a profit. So sell t-shirts and claim that income (tax ID required) sell decals etc. Do you have to make a profit every 5 years? No, but the odds of you getting audited goes up dramatically. So you better have your ducks in a row as they say. __________________ If you look in your mirror and see a line of cars behind you, be kind and pull over.

12/15/11, 5:46 PM	#18 Re: Racing as a business?
TQ29m Senior Member Join Date: Aug 2008 Posts: 6,246	I'm thinkin chain yanker!!!!Bob! __________________ "Being old, isn't half as much fun, as getting there"! Ole Robert I!

12/14/11, 1:15 PM	#12 Re: Racing as a business?
kcarm92 Senior Member Join Date: Jul 2007 Posts: 1,241	our insurance agent tells us if we claim it as a bussiness or not we can not get coverage on racecars or parts as far has fires you can set a amout on coverage on content but that aplys to tools ,welders ,etc but not racecars,or engines, also found out if car is in trailer and trailer is stolen, trailer is covered but not car or contents,thats from two different carriers,and yes if you run it as a bussiness, you must show profit every 5 yrs. what our tax people say

12/14/11, 1:30 PM	#13 Re: Racing as a business?
Speedwrench Senior Member Join Date: Jul 2007 Posts: 1,047	Can guarantee from experience that if the car or parts are stolen from your shop/home garage that your homeowners guy wil tell you that you are SOL. be forewarned.

12/15/11, 11:54 AM	#15 Re: Racing as a business?
DAD Senior Member Join Date: Aug 2009 Posts: 5,955	A wise man once told me that you should never allocate more than 10% of your business gross into advertising unless the advertising is going to be on a race car. Advertising at races, in race programs, racers boards and even on race cars is a good way to get your name out there in front of the public.