Questions about Sponsorships.

Ok, I have finally worked a deal with a colleage to arrange for a rather substantial sponsorship that would easily cover my shortened season and a trip to nationals. That being said I have a couple questions on how I should go about handling the money so I don't get hit with it as income.

The general plan is to start a race team with a dba and ideally would be owned by myself but that can't happen till after my divorce is final for obvious reasons. Business may be in my father's name for now. However, the question I have is how does the small business report the money? Do I only pay taxes on the portion not spent (net income) after expenses?

I can probably resolve most of this with our corporate tax attorney but wanted to see what you guys may have done in the past if the road has already been paved to a best plan.

Thanks!

Matt,
I've never received money to support the habit.

Firestone mounts and balances my tires for free...
Bell gives a % off their list prices...
Dad fixes body damage...

Nothing to see here, please move along.

you get into a whole lot of issues w/ a deal like this. one being DOT regs. if you get money from a sponsor or as winnings, you fall under the interstate commerce DOT regs. myself and Mitch got questioned while returning from Mid Ohio by Texas DPS. w/ the sponsor info on the trailer, it could have gotten bad if i had accually accepted money from Moonlite or had returned w/ the Toyo ChecK ($1K) in hand.
w/ sponsor info all over the car on an open trailer (more so w/ a well known name sponsor) your risks increase.

there is a book called ......well i forget, but James Proctor knows, about running racing as a business. point of the book is, it does not have to be a well run business, or one that turns a profit. :wink:
PM James (Allzway).

http://www.ssapubl.com/productList.a...usinessTeamOps

Be careful of the Hobby Laws.
Structure it correctly, and it can be worthwhile.
Once you buy one book from Steve Smith, you'll get monthly flyers which will suck you in to buy more.
(Ask me how I know.) :wink:

-=- Todd

Thanks guys. Hadn't much thought of the DOT laws and BS but knew they were a potential problem.

I too in the past had recieved either deep discounts or just free services but I have worked pretty hard for this setup and it's a great deal with VERY few outside committments.

I hope this is just the first couple steps on the way to something bigger!

The Rolex 24 is next January and the 24 Hours of Le Mans will be after that around May. :wink:

-=- Todd

Quote:

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Originally Posted by Todd Covini

The Rolex 24 is next January and the 24 Hours of Le Mans will be after that around May. :wink:

-=- Todd

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Steps Todd....not international flight! :wink: