AboutMike Wellman Expertise I was a former Manager with Price Waterhouse, now PricewaterhouseCoopers, the largest accounting firm in the world. I have had clients in almost every industry and of every size.
I will only answer questions dealing with IRS problems such as delinquent tax returns, Offers in Compromise (Tax Settlement), IRS collection matters including installment agreements, liens, levies, seizures, audits, appeals, innocent spouse claims and injured spouse claims. All other will be referred to the question pool.
Experience Over 25 years experience in taxation specializing in IRS collections, examinations and appeals.
Publications New York Times, Wall Street Journal, Your Money.
Education/Credentials BBA, Baylor University.
Awards and Honors IRSOS.com won the Knowledgeweb award for educational excellence for content.
Expert: Mike Wellman Date: 1/24/2008 Subject: Race Car Driver and sponsors
Question I see that the expense for the sponsor maybe deductible but is it taxable to the individual who is receiving the money and just racing for fun.
Answer Yes, but only if his sponsorship income exceeds his expenses from racing (doubtful but possible). As a hobbyist, he can deduct his expenses from his sponsorship income. If it is a profit, he pays tax on it. If it is a loss, then it there are no taxes due, but the loss cannot be used to offset other income. It is just shown as zero.
