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onenastynotch
12/16/2013 4:37pm
12/16/2013 4:37pm
Edited Date/Time
12/18/2013 7:27pm
hey guys im looking to grab a new 250f after years on a 450 and 250 smoker .....I have my own shop and I was looking to plaster my name all over it and try and use it as a advertising writeoff ...has anyone here done so ?
The Shop
Our tax accountant recommended being super-aggressive in claiming expenses as long as there is something to reasonably defend the expenses..... such as a business sticker on a CR250 fuel tank... and the worst they will do is disallow the write off, in which case you're no further behind for having tried. Its when you claim things that are totally non existent that they start getting angry. I'm not sure how sound that advice is, but I'm not in jail. (-:
I did it before on an other business venture with other fixed assets. I am not an accountant, nor am I a CPA...
But it worked, was audited, and never had any trouble.
A quick search on the google machine turned up this...
"If the business sponsors or advertises at an athletic event or show or takes on any other type of sponsorship, but the advertising of the business for that sponsorship does not meet the "ordinary and necessary" IRS regulations, it cannot be considered advertising and is not tax deductible. For instance, a day care center owner who likes horse racing may want to reconsider sponsoring a horse and placing advertising on any of the horse equipment to get an advertising tax deduction. There may be very few benefits for this type of business to advertise in this type of event and, If audited, the IRS may decide it doesn't meet the "ordinary and necessary" regulation, thereby eliminating the deduction."
And somewhat related...
"When an item is blatantly branded with the business information with the sole intention of using it as an advertising deduction, without there being any real advertising value, it does not constitute a viable tax deduction."
http://smallbusiness.chron.com/taxable-advertising-expenses-23465.html
Not saying you can't do it, but you better be aware and educate yourself on the subject.
Peg "If 2 kids are worth $1000, imagine what 15 are worth!"
Al "....The Gas Chamber?"
1. An ordinary expense is one that is common and accepted in your industry.
2. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.
It is all up to the judgement of your IRS auditor. Some will let you have it and some will kick it out.
The bad part is, if you get audited and the IRS doesn't allow the write off you have to pay penalties and interest for the adjustment to income that is past due.
If you do decide to write it off and it is a new bike, you could depreciate the full amount in one year by using Section 179 deduction.
Pit Row
I'm talking whole bikes, tools, equipment, and even my moto Van. All the government wants from you is a return on their investment, so to speak. If you are increasing your tax contribution every year, without huge spikes, you'll more than likely never be audited for as long as you live, no matter what you write off. Obviously this is the goal of any business, its just easier said then done, especially for a smaller business, as I' am sure you know.
If you can actually increase profits to a discernible degree, and show the investment is responsible, this can absolutely be leveraged against any audit and/or subsequent fines and interest.
The more the investment appears to, or actually does, increase your revenue, the less likely it is to cause you problems. ..and the closer the items are to the subject matter of the business (i.e. buying a bike to promote a bike shop), the better off you are as well.
I say go for it man. It sounds like its all Kosher to me.
Positive my right offs are legit but for a few weeks after submitting my return every year I pray I just slide under the radar and don't get audited.
Post a reply to: buying a bike thru your business for an advertising write off?