sponsorship
10-13-2004, 04:40 PM
#16
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Not a CPA but a "Soxley" qualified audit committee member who sits on numerous boards. I'd guess that an acid test for how much $ you could expense as advertising would be what are the arm's length benchmarks? i.e. what would a disinterested third-party businessperson pay to advertise on your racecar? I'd feel secure defending an expense for advertising my business on the car or my driver's suit if I could show that I'd sold similar space to comparable businesses for comparable dollars. Speaking for myself, I must admit that with this approach I could paper the car end-to-end with ads without paying for a set of tires...
10-13-2004, 05:11 PM
#17
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Also think about the legal liability of advertising/sponsorhip. I don't remember if they won anything or if it was just a nusicance law suit but a friend of mine advertised on a dirt track car that ended up hurting some fans and another driver. They sued everyone including the sponsors on the car!
10-13-2004, 05:24 PM
#18
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Greg,
That's a whole other subject but I've heard similar horror stories. Even though they make you sign a waiver when you get into the track it does not mean anything.
Geo,
I agree more info is needed. I don't have ready access to the docket for that case I quoted. The article refers to the CPA firm being hit by the IRS not the taxpayer.
I still think that if you can prove exposure and proper pricing you can deduct it. I ahve (on the other hand) seen some that put stickers ont he car, take some photos for their tax file and then take them off... Clearly a scam.
Another thing to consider is whether your sanctioning body allows for advertising.
That's a whole other subject but I've heard similar horror stories. Even though they make you sign a waiver when you get into the track it does not mean anything.
Geo,
I agree more info is needed. I don't have ready access to the docket for that case I quoted. The article refers to the CPA firm being hit by the IRS not the taxpayer.
I still think that if you can prove exposure and proper pricing you can deduct it. I ahve (on the other hand) seen some that put stickers ont he car, take some photos for their tax file and then take them off... Clearly a scam.
Another thing to consider is whether your sanctioning body allows for advertising.
10-13-2004, 05:35 PM
#19
Race Director
Well I think brandon has is right. If in concept at least.
I have a race car and I take it to many race events. People see the race car and watch it compete. Sure they may just be other folks in the paddock, but these other racers watch look and come over. They see the decals on the car. It IS WORTH something in terms of advertising.
In fact I have become aware of MANY companies through the decals on the car. If there were NO decal on the car then I would not know about the business. Seems to me that the decals are advertising. Now the question is how much are the worth? Well this is what gets stickly and where Brandon's approach is correct. How much would you SELL that same space and exposure for from another company. How mcuh would your company be willing to pay on competitior's race car for the same exposure/decal package. Of course this type of sponsorship need not be the "best value", but it should represent a reasonable attempt at value.
IMHO.. taking pictures of the car with the decals only then to remove them is just plain wrong.
Example... on how advertising works..
Mitch... I see you have a banner on you car that says "Foregin Affair" What is that? Is that a Porsche repair shop or something else.
I have a race car and I take it to many race events. People see the race car and watch it compete. Sure they may just be other folks in the paddock, but these other racers watch look and come over. They see the decals on the car. It IS WORTH something in terms of advertising.
In fact I have become aware of MANY companies through the decals on the car. If there were NO decal on the car then I would not know about the business. Seems to me that the decals are advertising. Now the question is how much are the worth? Well this is what gets stickly and where Brandon's approach is correct. How much would you SELL that same space and exposure for from another company. How mcuh would your company be willing to pay on competitior's race car for the same exposure/decal package. Of course this type of sponsorship need not be the "best value", but it should represent a reasonable attempt at value.
IMHO.. taking pictures of the car with the decals only then to remove them is just plain wrong.
Example... on how advertising works..
Mitch... I see you have a banner on you car that says "Foregin Affair" What is that? Is that a Porsche repair shop or something else.
10-13-2004, 06:56 PM
#20
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Thread Starter
Juan:
I have a franchised lawn care business that would benefit from some exposure. The hard part is really determining a value. Many of the folks that race and or DE are of a type that buy these services. I can see being able to sell space to other companies would help support whatever sponsorship y company paid.
Mike
I have a franchised lawn care business that would benefit from some exposure. The hard part is really determining a value. Many of the folks that race and or DE are of a type that buy these services. I can see being able to sell space to other companies would help support whatever sponsorship y company paid.
Mike
10-15-2004, 08:32 AM
#21
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Foreign Affairs is a race shop that built my car. I allow them to put that banner on in exchange for goods and services. I advertise my business on the car as well. I am finishing up negotiations with a drug manufacturer to let them advertise on my car. I have been getting alot of spam emails with the message that I can be paid to advertise on my car, I should see how much they are willing to pay although I'm sure it's not much and I don't put enough milage on my track car.
