[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?

[nape]

Nape...you can certainly run a business and use racing as a form of advertisement. Several people I know do this. You could end up getting into trouble if you get audited and cannot show that your racing ever resulted in revenue for the company though, so its not a slam dunk. In an audit, the IRS may decide to claim that your advertising is actually a hobby and is unrelated to the business. This is a difficult one for sure.

Paid sponsorship definitely qualifies the racing effort as a business. It is an advertising company, similar to a magazine.

So, if the consulting company is making money and using lead tracking as a way to justify advertising money spent, I would be able to write off whatever money was spent on the race car as advertising as long as it was approximately the same?

Sorry, Al, but I've always had trouble wrapping my mind around tax info.