Tax Deductible Amateur Motocross

BobInIndy
Posts
16
Joined
5/8/2010
Location
Noblesville, IN US
The latest issue of the Kipplinger newsletter includes a tax case where the father of an amateur deducted $160,000 in motocross expenses over a 2 year period as business related expenses.

"The Tax Court said that most of the $160,000 was a deductible business expense because the firm obtained new business connections, favorable construction financing deals and other similar benefits from its sponsorship."

Something to consider.
|
kkawboy14
Posts
11494
Joined
6/5/2015
Location
TX US
1/20/2018 5:54am
If you file it as a business expense it’s harder to prove that it’s not personal. If you file it as a marketing/advertising expense the proof is simple!
MotoChris
Posts
427
Joined
12/12/2016
Location
Vilonia, AR US
1/20/2018 7:16am
How do u file it as a business expense without it being marketing/advertising?
TheGetFresh
Posts
1656
Joined
8/12/2015
Location
COOL GY
Fantasy
2551st
1/20/2018 8:20am
MotoChris wrote:
How do u file it as a business expense without it being marketing/advertising?
I think he means that it’s easier to prove equipment or travel expenses for motocross are not necessary for the business. If you own a construction company, it’s pretty easy to prove a Dirtbike is not a piece of equipment for jobsites.

If you put it in your marketing line, you can say that buying the dirt bike/equipment, putting your name on the side of it and taking it to racing events that are filled with locals that use the services your company provides then you can argue that the expenses were necessary to generate sales leads and develop brand recognition.
Mini Elsinore
Posts
1968
Joined
8/17/2006
Location
Huntington Beach, CA US
1/20/2018 8:23am
Or........you can set up "Jeff Ward Racing Products" or "Mysercough Machines" or "Flying Mike Brown Racing Products". Jack Ward taught all the Dad's how to do this in the 1970's.

The Shop

MotoChris
Posts
427
Joined
12/12/2016
Location
Vilonia, AR US
1/20/2018 8:30am
Got it, I misunderstood what Kkawboy14 stated. We have always filed racing expenses as advertising. I thought he was saying that there was an alternative way to file those expenses and that it would be harder to justify as advertising.
fatcat
Posts
186
Joined
2/1/2016
Location
Louisville, KY US
1/20/2018 10:14am
Better take a good look at those new tax laws.

Post a reply to: Tax Deductible Amateur Motocross

The Latest