Porsche related tax question

[Aurel]

So, tonight I was preparing my tax return with Filesafe.com, and in the deductions section I stumble on this:

Hobby expense (To extent of income)
Safe deposit box
Uniforms and protective clothing
Work tools
Gambling losses (To extent of winnings)

And this got me thinking: my Porsche engine rebuilding seems to fall in the hobby expense category, right? So, could I deduct all my engine rebuilding costs? That would be sweet...Has anyone done any research about tax deductible hobby expenses?

Aurel

[Hugh R]

Is this Federal or New Jersey? Never heard of deducting a hobby

[lendaddy]

Only the the extent that you have "hobby income", just like gambling.

The Hobby deal is used by amateur racers that earn purses for victories, etc....

[hytem]

fantasy sports, too. But you have to have a history of earning money and reporting it as taxable income. Then you can deduct losses.

[Aurel]

Ok, got it. Nope, my Porsche hobby does not generate any income, quite the contrary

Aurel

[berettafan]

those items are also called 'audit flags'.

[pwd72s]

Originally Posted by berettafan

those items are also called 'audit flags'.

+1! Aurel? I have a friend who works for the IRS. He will look over your return, and may be in contact later.

[911Rob]

My entire car is a write off; hee, hee.
Love those tax laws!!!

[WolfeMacleod]

My 924S is deductable. I use it as my business car. It gets taken into the shop once a year for a "fix all" in December, too.

[Porsche-O-Phile]

Precisely why owning a business (even on paper) is becoming one of my top priorities. The tax implications alone make it worth doing.

Any dime that I can keep out of the government's hands is worth doing. They steal enough from us as it is and I intend to use any/every means possible to keep my money where it belongs - in MY pocket.

[berettafan]

Originally Posted by Porsche-O-Phile

Precisely why owning a business (even on paper) is becoming one of my top priorities. The tax implications alone make it worth doing.

Any dime that I can keep out of the government's hands is worth doing. They steal enough from us as it is and I intend to use any/every means possible to keep my money where it belongs - in MY pocket.

Was talking with an agent last week and, as usual, i was picking her brain about what her most common 'wins' were. #1 was auto expense abuse.

[lendaddy]

Originally Posted by Porsche-O-Phile

Precisely why owning a business (even on paper) is becoming one of my top priorities. The tax implications alone make it worth doing.

Any dime that I can keep out of the government's hands is worth doing. They steal enough from us as it is and I intend to use any/every means possible to keep my money where it belongs - in MY pocket.

Again, this only works up to the amount you made on your business. You can't just have a paper business and expect a return. Once your writeoffs exceed your income from that business you get no advantage. So if you have no real income you get no advantage.

[911Rob]

Originally Posted by berettafan

Was talking with an agent last week and, as usual, i was picking her brain about what her most common 'wins' were. #1 was auto expense abuse.

Ahhh, when dealing with an IRS/Rev Can audit; the rules of the game are a little one sided. There are NO WINS for anyone but them.

I employ all kinds of Chartered Accountants and CMA's and have been audited at least two dozen times in my adult life. They win everytime no matter what I pay in accounting fees! They are crooks, period. Scariest bunch of bandits that walk the planet.

[Hugh R]

One problem in the US is the vagueness of the IRS code. They allow you to deduct from the sale price of a vehicle expenses other than routine maintenance. What does that mean? I sold an old car about six months ago for an awful lot of money. I'd owned it 36 years. The owner's manual describes routine mainteance as; oil and filter every 2,500 miles (12 quarts!), spark plugs, rotor condensor and coolant every 10,000 miles, etc. It doesn't say anything about scheduled changing of brake pads, batteries, front end rebuilds, trannie rebuilds, paint, leather, carpet, rubber seals, chrome plating, light bulbs, engine rebuilds, etc. I put 7 batteries in that car over 36 years! Can I write off 7 batteries, or just the last one that was in the car when I sold it? How about three paint jobs, and three engine rebuilds?

Also, you can only write off the actual dollars you put into it. So using a battery as an example, I bought one in 1971 for $22, I still have the receipt. The last battery cost me $105, I have the receipt for that battery as well. Writing off a $22 expense 36 years ago is like taking a $4 deduction in today's dollars.

[berettafan]

Jeez Rob, a dozen plus times?! You either need to quit cheating or hire better accountants.

[berettafan]

Forgot; you are in the land of ice hockey and beer. my comment might not apply!

[911Rob]

Originally Posted by berettafan

Jeez Rob, a dozen plus times?! You either need to quit cheating or hire better accountants.

Hey Berretta,
it was actually closer to TWO dozen buddy.
No bad accounting, in fact if anything 'good'.
I've lived in BC for eight years and I still use my guy from Calgary; can't find anyone as good as him.

I made quite a bit of money before my demise; Rev Canada just couldn't stand the fact that my development company had multi-millions in revenues and only paid corporate tax on about a quarter mil per year. Most people send their taxes to Winnepeg in Canada for filing; I had my own designated officer right in downtown Calgary at the Harry Hays building; my corporate and personal taxes were sent directly to him every year. They were down right nasty.

I was audited every year for several years in a row, both Corporate and Personal. In addition, they would audit me for Workers Compensation, Unemployment Insurance and our Goods and Services Tax, Every year!

Buddy, what can I tell ya; I use to start shaking when I heard the word "Rev Can". I shut 'er down in 2000 and they leave me alone now; just a regular bloke like the rest of them.

Cheers,

[911Rob]

BTW, my nickname used to be Berretta after the TV Show starring Robert Blake.

My mom re-married and changed my name to Blake, everyone in High School use to call me Berretta (1978ish). I changed it back to my legal name when I moved out.

[berettafan]

that surely does not sound like a fun scenario!

while i love cop shows from the '70s my screen name is a reference to the most reliable shotguns in the world. actually met Ugo Beretta in the NYC store on a visit and got him to sign a book on the history of Beretta.