Originally Posted by KC_Bobby
I had wondered about financial winnings and losses in the past and with Mark's thread about 1099's I figured I'd ask away to see what others have done.
Has anyone set up an LLC for their comp team? I don't know what it would cost to do so, but if I listed the team as a business I wonder if it would be benefitial to my taxes. So far this year we've spent well over $5,000 to do a handful of comps this year. This includes entry fees, meats and supplies, smokers and a trailer - you know, business supplies and equipment) and have won $25.
Could the business be listed as a catering business and the comps be listed as promotional/advertising expenses? Yeah, we'd claim catering revenue (if we ever did do that) and comp wins. Let's face it, it's going to be awhile before the revenue outweighs the expenses - if that ever happens.
Just wondering if anyone's done it, thought about it or has any advise.
I am not a lawyer but we went through this for my wifes pet sitting agency. We incorporated to protect ourselves from any personal litigation should there be a lawsuit against her business. Thats the good part of incorporation. The other or dark side of corporation is that the IRS will know about everything in your business. You will pay tax on all assets of your corporation. This could include your smoker or other assets of your company. It is not uncomplicated. Her first business running an internet storefront that had very little chance of litigation, so she ran it as a DBA and life was so much better. Let me tell you, the less the IRS knows about what you are doing the better.