Is my racecar tax deductible?

Question

I bought a racecar last year with a partner and plan to advertise the name of my business on the side - he plans to advertise his as well. We both plan to race the car. What portion, if any, of our expenses are tax deductible?

Answer 1

Unless you are a professional race driver the IRS will almost certainly treat this as a hobby. You'll be able to claim any business expenses against any income (prizes you win) but only up to the extent of any earnings (winnings). They won't let you take a loss on a hobby.

As to any business deduction for your other legitimate business, forget it! Claiming a non-business vehicle as an advertising expense is explicitly prohibited. You MAY be able to take an advertising expense deduction for the cost of the advertising materials and their application to the vehicle but that's about it.