[mitchntx]

OK ... I think I have all the elements in place to call my racing a business.

I have been reluctant in the past because in CMC there is no prize money and therefore no attempt at income.

But now that I have landed this Texas Driving Experience driver/instructor gig, there is my avenue for income.

It is my undersanding that all expenditures that I incur to help me in my driver/instructor role can be deducted.

All my safety gear is obvious ... suit, helmet, gloves, underwear, shoes ...

But what about the CMC car itself? Could I not contend that without the car, I would have never gotten the job? And to increase or maintain my skill level, I must continue my education as a driver ... enroll in CMC hands on "seminars" ... al of which is deductible ...

Right now, I am being paid via a 1099 and as an individual. Should I set up a sole proprietership and have TDE pay the SP? Could I, as an individual, support that SP from my regular income and get a tax break that way?

What about my shop where I build and maintain the car(s) ... how would that figure into the equation?

[sgarnett]

As someone already touched on, claiming part of your house as an expense is a minefield. Just don't go there.

Also, depreciation is different for different things, so don't just assume all capital is 5 years (for example, PCs are 7). You can also take a section 179 deduction (up to a fairly high limit per year), which allows you to take the whole depreciation deduction in the first year, BUT you need to actually keep the capital for it's full depreciation period or you will owe some money back to the IRS.