HELPING YOUR CHILD’S CAREER
A father owned a profitable real estate development business. His teenage son was a local celebrity for his successful motocross racing, so the father decided to have the company become a sponsor for his son’s racing activity. Over a two-year period, the firm paid $160,000 for motorcycles, equipment and other costs. The funding ceased when the son turned pro.
The Tax Court said that most of the $160,000 was a deductible business expense because the firm obtained new business connections, favorable construction financing deals and other similar benefits from its sponsorship.
AIRPLANE
Rather than drive five to seven hours to check on their rental condo or be tied to the only daily commercial flight available, a couple bought their own plane. The Tax Court allowed them to deduct their condo-related trips on the aircraft, including the cost of fuel and depreciation for the portion of time used for business-related purposes, even though these costs increased their overall rental loss on the condo.
