buying a bike thru your business for an advertising write off?

onenastynotch
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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 ?
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davistld01
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12/16/2013 4:47pm
I'm in the car business, and LOTS of people put custom wraps with their company logo on high end SUV's & trucks for a write off. Consult your CPA, but I don't see why it wouldn't be the same deal.
sec114
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12/16/2013 4:57pm
good topic here that i may be doing in about 4-6 months.
mag23
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12/16/2013 5:04pm
Yep... it works... I wrote off a bike the year I was audited, and the officer said no problem. I would suggest you claim the income when you sell the bike though...Whistling
activeMX
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12/16/2013 5:06pm
I wrote off the cost of bikes under my business for years. Totally legit expense.

The Shop

SPYGUY
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12/16/2013 5:08pm
activeMX wrote:
I wrote off the cost of bikes under my business for years. Totally legit expense.
Were you ever audited?
newmann
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12/16/2013 5:35pm
You still have to buy it and pay sales tax on it and then it becomes property of the business. Subject to personal property tax every year......lol the joys of owning your own business.
12/16/2013 5:36pm Edited Date/Time 12/18/2013 5:26pm
We've been audited, although not since sticking a sticker on the bikes and writing off a bunch of mx costs as an advertising expense.

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. (-:
Jack mehoff
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12/16/2013 6:05pm
My wife is a CPA , yea it's totally legit , but talk to your CPA to see what they are comfortable with in a audit , some will want the bike as a asset ,and depreciate it each year , and let you write off entry's parts fuel etc , it's best for your company to be the most prominent advertiser on the bike with phone number , if your shop is mx related it should be a no brainer during a audit
Socket946
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12/16/2013 6:15pm
My wife is a CPA , yea it's totally legit , but talk to your CPA to see what they are comfortable with in a audit...
My wife is a CPA , yea it's totally legit , but talk to your CPA to see what they are comfortable with in a audit , some will want the bike as a asset ,and depreciate it each year , and let you write off entry's parts fuel etc , it's best for your company to be the most prominent advertiser on the bike with phone number , if your shop is mx related it should be a no brainer during a audit
THIS.

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.
GoonSquad250x
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12/16/2013 6:48pm
I did it. I wrote off my bike, all the parts & gear that year. Wrote it off as advertising because I went to a few races. My CPA said is was marketing & we could do it. I did it my first year when I opened my company.
SPYGUY
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12/16/2013 7:19pm Edited Date/Time 12/16/2013 7:21pm
I think there are certain cases in which one could present a reasonable case to the IRS, if need be, to justify why advertising dollars were spent on a personal racing hobby. In other instances it could prove to be much tougher. In my opinion it would depend on, among other things, the amount of, in dollars, "advertising" in question, the type of business itself, and the ability to show a true benefit to the business.

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
BobbyM
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12/16/2013 7:48pm
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...
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 ?
Yes...consult an acct-man and keep all receipts
MX_Andrew83
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12/16/2013 7:55pm
Yes, a good friend of mine did it with all of his mx stuff, including race fees. When I was a kid my Step Dad had his company logos in the glass of my Surf Boards, my friends thought it was hysterical...
tmauto769
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12/16/2013 8:00pm
I never wrote off the whole bike, just the graphics themselves which had my company name on them. That would make me a little nervous writing off the whole bike. But if you got away with it, good for you I guess.
KAB
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12/16/2013 8:42pm
You need to be wise and careful about this. I have a friend who had a good motorcycle repair/sales shop and he got hit hard by the IRS on this. The IRS isn't stupid and you will need to show/prove how this helps your business. (He also consigned motorcycles and didn't sell half of them and gave them back to the owner. But, because he didn't have consignment agreements the IRS "considered" he sold all of them and treated it as income.) I own an auto repair business and ride in the desert and wanted to write off everything. My accountant advised me to be prepared to show sales receipts of repairs performed in the desert if I do this or the IRS won't fall for it.

Not saying you can't do it, but you better be aware and educate yourself on the subject.
me_da_racer
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12/16/2013 8:49pm
Do it with every dine I spend on MX. From parts, gas and race fees.
willie838
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12/16/2013 9:06pm


Peg "If 2 kids are worth $1000, imagine what 15 are worth!"

Al "....The Gas Chamber?"
D702
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12/17/2013 5:49am
According to the IRS, for an expense to qualify as a deductible business expense it has to be both ordinary and necessary in your line of business:

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.
Katoomey
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12/17/2013 6:15am
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...
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 ?
For the last 3 years I have wrote everything off as either marketing or research and development (i'm a free-lance mechanical designer by trade).

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.
piscokid
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12/17/2013 9:31am Edited Date/Time 12/17/2013 9:37am
Self employed for years, Boy races, I have never written off (or had the company buy) the bike. I have written off all the stuff I buy to maintain the bike thru the business. It is written off as advertising. Never had a problem. I own an industrial distribution company that sells oil, so my accountant said there should be no issues. There are a lot of guys at the track that advertise trucking companies, landscape companies, construction business, etc.
activeMX
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12/17/2013 9:49am
SPYGUY wrote:
Were you ever audited?
Nope!!!

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.
Jack mehoff
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12/18/2013 11:12am
SPYGUY wrote:
I think there are certain cases in which one could present a reasonable case to the IRS, if need be, to justify why advertising dollars were...
I think there are certain cases in which one could present a reasonable case to the IRS, if need be, to justify why advertising dollars were spent on a personal racing hobby. In other instances it could prove to be much tougher. In my opinion it would depend on, among other things, the amount of, in dollars, "advertising" in question, the type of business itself, and the ability to show a true benefit to the business.

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
Again consult a acct before you do it , keep in mind if this stands out as a big deduction , you will get flagged and audited , again your acct will be the one standing in for the audit , i asked my wife and she has been through several audits , with this subject and never had a problem , her firm deals primarily with dentists and a lot off them race cars and wright it off . She said if your are in the repair or sales off cars or motorcycles it falls inside off the IRS scope off that industry it really should not be a issue . One other thing she said if you are in primarily auto repair , you can tell them you are trying to grow into that market off motorcycle repair and get away with it for a number off years with a loss. Where people get them self in a jam is 10 years off advertising with no direct correlation off sales to that business .
jtomasik
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12/18/2013 11:20am Edited Date/Time 12/18/2013 11:21am
This government guiding moral and legal actions of the public is the purest definition of irony.
englishman
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12/18/2013 11:29am
Yes I do it , along with track fees , race fees, and everything that I buy related to it.
Jack mehoff
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12/18/2013 11:39am
KAB wrote:
You need to be wise and careful about this. I have a friend who had a good motorcycle repair/sales shop and he got hit hard by...
You need to be wise and careful about this. I have a friend who had a good motorcycle repair/sales shop and he got hit hard by the IRS on this. The IRS isn't stupid and you will need to show/prove how this helps your business. (He also consigned motorcycles and didn't sell half of them and gave them back to the owner. But, because he didn't have consignment agreements the IRS "considered" he sold all of them and treated it as income.) I own an auto repair business and ride in the desert and wanted to write off everything. My accountant advised me to be prepared to show sales receipts of repairs performed in the desert if I do this or the IRS won't fall for it.

Not saying you can't do it, but you better be aware and educate yourself on the subject.
Kab if you have auto and motorcycle repair on the door and you where racing a organized event where there is a audience for your market ( motorcycle repair )you would be able to write off for a few years at a loss , as trying to grow that new side off the business and if it did happen to take off you could squeeze more into it because there is a direct correlation to that side starting to take off , the problem always comes when there is a deduction that's way out off WAC , and the way you defend it , examples showing your bike with mods or bolt ons at the track , justifies to a consumer that you are capable off pro forming the work related in the field , you need a bike to put those parts , depreciate it over 3 years show them that was your business plan to get this started to see if there would be a viable return on your Company's investment . Discuss it with your accountant that way and I think he will tell you to go for it within certain boundaries and feel confident in a audit , worst case you get to race for free for a few years , best case it turns into a job that you have a passion for.
12/18/2013 12:06pm
The best is actually to lend it to a fast kid for a month before LL or equivalent, make a few pictures, then keeping it the rest of the year.
Matt Fisher
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12/18/2013 12:50pm
jtomasik wrote:
This government guiding moral and legal actions of the public is the purest definition of irony.
True. So very true.
put_chug
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12/18/2013 3:05pm
dirty bastards haha
12/18/2013 4:18pm
All you small graphic companies should be writing off your race bikes! You're advertising your personal business....

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