03-19-2007, 07:05 AM
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CC Member
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Join Date: Apr 2001
Location: Fort Worth TX USA,
TX
Cobra Make, Engine: Lone Star Classic Competition #56, 425HP Lingafelter 428 Cobrajet
Posts: 75
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Not Ranked
Can one deduct cost of a kit car as a hobby?
Can anyone confirm if the cost of a kit car (or parts upgrade) exceed 2% of one's adjusted gross income, that one can deduct the cost of your Cobra car (or parts) of one's "hobby" on the 1040 Schedule A form?
(The IRS defines a hobby as an activity that you pursue without expecting to make a taxable profit, i.e. not making a profit in at least three tax years of the past five tax years, including the current tax year. Afterwards, a profitable sale of your hobby is taxable as a capital gain on your tax return, but a loss upon the sale is not tax deductible on your tax return.)
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