Club racers Inc? - Chicagoland Sportbikes
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post #1 of 8 (permalink) Old 11-06-2004, 08:53 AM Thread Starter
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Club racers Inc?

If this has already been covered then please forgive me. Is it a common practice for club level racers to incorporate? I know that technically club racing is kind of a hobby but we all want to keep as much of our cash untaxed as possible. Just wanted to know if this was common.

Been dere done dat dis dere and de udder ting. OH and whatnot
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post #2 of 8 (permalink) Old 11-06-2004, 07:20 PM
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Some do, most don't. Remember, you need to show a profit after 3 years, or the IRS will consider it a HOBBY. There's really very little cash money in racing at the club level... you might get away with calling your "business" advertising and promotion. Some racers who own legitimate businesses will write off a portion of their racing budget as 'advertising expense', but you have to be careful.

Any tax experts in the house?

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post #3 of 8 (permalink) Old 11-07-2004, 10:58 AM
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post #4 of 8 (permalink) Old 11-09-2004, 09:55 AM
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You also have to enter money racers every weekend, like umlimited GP.

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post #5 of 8 (permalink) Old 11-09-2004, 05:35 PM
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Originally Posted by KBOlsen
Some do, most don't. Remember, you need to show a profit after 3 years, or the IRS will consider it a HOBBY.
I know this is true for sole proprietorships and the like, but I think that corporations don't fall under this rule. The idea seems to be that, if you bothered to incorporate at all, you meant to do business, even if you're incompetent at it.

Seems like the main benefit of a club racer's incorporating would be to protect the racer's assets in case of a catastrophe. So, for example, if the racer's corporation borrows $15,000 and puts it into a nifty new bike, and the racer then goes on to crash it on the first pit-out, the lender generally can't go after the racer's personal assets, only the corporation's. Disadvantages would be vastly increased paperwork, accountancy expenses, and so on.

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post #6 of 8 (permalink) Old 11-16-2004, 07:16 AM Thread Starter
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Thanks for the feedback

I was thinking of the liability side of things but also about sponsorship. The guy I work for is a friend and a bike friendly sort. Instead of having him pay me extra salary/commission which is taxed to both of us, I was discussing him spending some "advertising" money on a race sponsorship.
With a pay increase we both pay taxes and then I spend after tax money (it looks like lots of it) on tires/fuel/bike upgrades etc... If he instead paid sponsorship money to a legitimately incorporated race team then.....
Anyway, I know almost nothing about this and I am always looking for a way to keep my money from being spent foolishly (like our not so trusted goverment), does on $900 toilet seats.

Been dere done dat dis dere and de udder ting. OH and whatnot
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post #7 of 8 (permalink) Old 11-18-2004, 07:54 AM
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HERE are some insights from one of the racer forums.

Kim
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post #8 of 8 (permalink) Old 11-18-2004, 01:48 PM Thread Starter
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Thanks Kim

Kim
Thanks I ordered the book that was referred to in the thread that you sent me. It looks like a good read.

Been dere done dat dis dere and de udder ting. OH and whatnot
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