Aug
26
Why can you list Snowmachine racing as a business?
By
minetomake questioned:
I am trying to educate myself about our candidates and ran across Palin’s 2007 tax return. Her and her husband obviously had to claim his winnings from his snowmachine racing, but in of that he claimed it as a “business” complete with depreciation, sale of a snowmobile, his cell phone, auto expenses, travel expenses, supplies… How is a leisure activity like this considered a business? His 17K in profits turned to an nearly 10K loss. Curious
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I am trying to educate myself about our candidates and ran across Palin’s 2007 tax return. Her and her husband obviously had to claim his winnings from his snowmachine racing, but in of that he claimed it as a “business” complete with depreciation, sale of a snowmobile, his cell phone, auto expenses, travel expenses, supplies… How is a leisure activity like this considered a business? His 17K in profits turned to an nearly 10K loss. Curious
Debt Leads Pay Day Cash and Sub-Prime Loan Seekers
Most races are sponsored by snow machine companies
racing is a business…….aka NASCAR……IRL……snowmobiles are the same
If he is making money at it he has the right to write of expenses paid in order to win that money. Keep looking maybe you will find that smoking gun you are trying for but this is called our current tax system.
It is a tax dodge. Many “business” owners are just people who know how to set up fronts to buy cars, trucks, snow mobiles, boats, etc and write them off as business expenses.
I know several business owners who write off their family vacations every year as business meetings because it is a family owned “business.” They also buy all their cars and vans for the family and write them off their businesses. Of course these people are Republicans and whine about how high their taxes are. But they mingle all of the business’ money with private recreation and transportation. They even expense their oil changes and car repairs.
Hi there, that’s a very excellent question. I will be posting a more complete answer on TaxProf blog on Monday. The IRS and the Courts consider an activity to be a business if the primary objective of doing is to make a buck. Palin really reported a small profit on the activity in 2006, then a loss in 2007. Section 183 of the tax code says that if a txpayer posts a profit in 3 out of 5 years, you can presume the activity to be a business. If a taxpayer cannot do that, then you have to look at the facts and circumstances of how the taxpayer conducts the activity. But the basic question to question is “was he in it more to make money or more to have fun.”
By the way, I cannot find any webpage for any association of professional snow machine racers. That suggests there may not be many folks who do this as a “professional.” Further, all the references to Todd Palin being a “professional” racer have come AFTER his wife was selected to be McCain’s running mate. I cannot find any references to him being a “professional” before that, although there are certainly tales of him winning the Iron Dog.
As I said, more on Monday over at TaxProf blog.
Regards, Mr. Tall Chief.