Page 56 - NM Spring_2021

dually for $45,000 in 2020. If you record) of everything in your shop Office deduction for this space.
bought the dually in an earlier year, for insurance purposes. The list If you are filing as a Sch C Sole
your options will depend on how should contain a description of Proprietorship, attach Form 8829 to
the truck was originally treated the asset, as estimated purchase your tax return. This form allows
for income tax purposes. If your date, an estimated total installed you to deduct a portion of your
mileage indicates that you use cost and an estimated current household expenses as a business
the truck 80% for business, then replacement value. If you decide deduction. Expenses allowed
you have a $36,000 tax deductible to deduct these items for business include rent, home mortgage
expense for 2020, assuming 1) income tax purposes, please check interest, insurance, real estate
your racing operation qualifies as with your insurance agent first. I taxes, repairs and maintenance,
a business, and 2) you properly suspect you might have a problem depreciation along with utilities
elect Bonus Depreciation. You do with a homeowner’s claim that such as power, water and gas. The
not need to have a positive race involves tools and equipment that portion of these expenses that
business bottom line to take this tax have previously been deducted are deductible will depend on the
deduction. Therefore, the net loss and/or are being currently used for square footage of the race office
helps with income in other parts of business purposes. space in relation to the overall
your tax return. size of the home and shop. Make
Shop or Home Office Expense a list of any office furniture and
Race Shop Equipment & Tools (Home Office Form 8829) equipment that you use to conduct
(Depreciation Form 4562) Do you have a spot in your shop racing business. This includes your
Most non-racers are shocked or home where you exclusively and cell phone. Your tax accountant
at the amount of tools and regularly conduct racing business will determine if there are allowable
equipment we’ve amassed over and is it your principle place for deduction opportunities with these
the years. You should have a list conducting race business? If so, assets.
(and perhaps a video or photo you may want to claim a Home
Continued on page 59

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56 Nitro Madness Magazine SPRING 2021