Race Car Winnings

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  • Super Mom
    Senior Member
    • Jun 2007
    • 1151

    #1

    Race Car Winnings

    I like Snaggletooth's explanation on past posts about cost of good sold. My concern is, if I use that and hence the 1099 will end up zeroed out, will the IRS have a problem with not seeing it on the return? I would like to avoid a cp 2000 or something if possible.
  • ChEAr$
    Senior Member
    • Dec 2005
    • 3872

    #2
    Originally posted by Super Mom
    I like Snaggletooth's explanation on past posts about cost of good sold. My concern is, if I use that and hence the 1099 will end up zeroed out, will the IRS have a problem with not seeing it on the return? I would like to avoid a cp 2000 or something if possible.
    Your post is a wee bit confusing. Cost of Goods sold has nothing to do with the race car business. His total winnings will also be gross profit, for after all, he is selling nothing.
    ChEAr$,
    Harlan Lunsford, EA n LA

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    • Super Mom
      Senior Member
      • Jun 2007
      • 1151

      #3
      ...but without no entry fees, gas or tires no money could be made. Snaggletooth's past explanation to the IRS makes perfect sense, was accepted by them and I think is acceptable by the definition of "cost of good sold". My concern is the return showing nothing for income with a 1099--can I break this down on some form for line 21?

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      • MilTaxEA
        Senior Member
        • Mar 2011
        • 203

        #4
        If it is a hobby: Line 21 for income, Schedule A miscellaneous income for expenses (subject to 2% of AGI).

        If it is a business: Schedule C for income/expenses (no COGS, but you can have expenses on Page 1)
        Michael

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        • Black Bart
          Senior Member
          • Jun 2005
          • 3357

          #5
          Re: Snaggletooth's explanation...about COGS

          Originally posted by ChEAr$
          Quote:
          Your post is a wee bit confusing. Cost of Goods sold has nothing to do with the race car business...after all, he is selling nothing.
          It all depends (yuk-yuk) who's doin' the racin' and sellin' and who your audit rep is, Alabam . If memory serves, I believe the Snagster convinced the Bogeyman a few years back that gas 'n' oil and such was COGS for his down a few bills racer.

          Snag said somethin' about it a few posts below -- maybe he'll come up and give us the lowdown and maybe a solution for S-Mom's zero-sum.

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