I have been wondering recently how I could use income from an LLC to sponsor my racing and be able to write it off at the end of the year.

For instance would I need to create another corporate entity?

 Or would I pay advertising money to myself from the LLC and spend more than I get paid or what?

This a wholly new concept to me and I am clueless about how to make it work.

Any suggestions?

T.OUT

It gets pretty "sticky" when you are sponsoring yourself. It can be done, but you definately need to dot your i's and cross your t's.

 

I would talk to your tax guy. Or................you could sponsor me, and then it would all be a lot easier.

 

Ken Gasbarri

Maybe if you could sponsor me.LOL

Alrighty then. You get to the finals, I will sponsor the fuel for that final round of elimination. I am thinking about 1 gallon max. You will accept 3 easy payments right?

 

Ken Gasbarri

You know,I have a sense of humor pretty much as good as the next guy and when my question was meant to be humorus or rhetorical I thought people would know.

 

For the record this was meant to be a real question.

 

I run alchy by the way with the occasional touch of can and no,no installments.Post dated check due on reciept of reciepts.;) ;)

 

Seiously though, is this something you know something about or not?

 

Anyone out there with a real answer?

yobaby;

 

Didn't mean to trivalise you question.

 

Like I said at first, the IRS looks long and hard when you sponsor your own operation. There has to be an honest business reason for sponsoring your own race operation. Just as a way to deduct those cost from your taxes is not going to get far.

 

Not being a tax expert, I would not use anything I say as the gospel. Talk to a tax person. You can get into trouble with people you don't want to take an interest in you.

 

I hope you can get it done in a way that won't get you in Dutch with the "man"

 

Ken Gasbarri

you can take a loss 3 out of 5 years on your racing business, so keep track of all the receipts and always check a expert

Talk to your accountant. 

 

I am partial owner in two businesses along with my racing business.  The main business is a medical equipment installation and service co that pays an annual advertising fee to my racing company. 

 

My racing company, Kerns Racing LLC is set up as a racing and advertising company and it lives and breaths just like any other company.  And like any other company you will need to spend some money to legally set it up with both the federal and your state goverment.  The best way to go is to have your lawyer set it up ($$$), so all the paperwork is filed properly and you have the proper documentation (corporate record book, seals, stock certificates, etc).  Yes, it cost money up front but the last thing you want is to have the IRS question your business status.  I offer advertising on my web site, on the car and trailer along with handing our flyers and freebies at the track (I'll bet I could talk just as fast as John Force if I got a ESPN TV interview!) along with just about anything else my customers request (for a fee!).  You have to think of the people who pay you money are customers, not sponsors!

 

As far as the 3 out of 5 year rule,  our accountants advised us that as long as the business is growing ( assets are increasing) and it is being run as an active business with the intent of making a profit (ie Gross Income Increasing every year) it can continue to run.   The 3 of 5 rule is for the guy that has no intent of having a real business, just a shell to take deductions.

 

There is money out there to be had, but don't believe for a second that everyone will "Sponsor you race car".  Mosty companies don't care about the car and your racing, they care about the customers that your operation will bring to them and the return on their investment.

 

 

Steve

www.kernsracing.com