@Cavinmccord wrote:
What if I were to build just a motor for a video and not use it in any specific vehicle could that be written off?
You can deduct ordinary and necessary expenses for your type of business. "An ordinary expense is one that is common and accepted in your field of trade, business, or profession. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be required to be considered necessary."
However, there are two issues, what happens before and after?
First, if you purchase items with an expected life of more than 1 year, they are assets, and must generally be depreciated over time. Sometimes, you can expense an asset in the first year, if it costs less than $2500 for example, and there are some other rules that might let you expense the item immediately. For example, if the engine block costs more than $2500, that's probably an asset. Then, what happens if you improve an asset? That normally adds to the depreciation, rather than being an immediate deduction. Such as the cost of pistons, camshafts, etc. So I really can't say if you can expense all the parts in the year you create the motor, or if you have to depreciate them. (But you also can'r depreciate items you hold less than 1 year, so that leads to the question of what do you do after the video is finished?)
Then, what happens after the video is done? If you sell the motor for more than the adjusted cost basis, that's taxable business income. Your basis is the price you paid for the parts, minus any depreciation. So if you did deduct the entire cost of the parts as a business expense, and then you sell the motor, the entire selling price is business income. Do you give it away as a raffle to your viewers? That's ok, but you can't "write off" anything else for the giveaway, if you already deducted the cost of the parts. Do you convert it to personal use by installing it in a personal vehicle? That could create a taxable event depending on what kind of expense deduction you used.
