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Re: Coil for rent?
Tesla List wrote:
>
> Original Poster: gweaver <gweaver-at-earthlink-dot-net>
>
> I am working on a moble Tesla Coil to rent out at parties. Got the idea a
> few weeks ago. I am looking for a 20 KW generator. I plan to put my large
> TC that makes 126" long spark on a trailer and pulling it to events like
> parties or what ever. I figure the total cost of this thing including the
> generator, trailer, truck to pull it with, etc. will be several 1000
> dollors.
> Haven't decided on a fair rental price yet but I think something
> in the neighbor hood of $500.00 for 2 hours of sparks would be a fair price.
In the special effects industry, we generally figured on something like
half a dozen rentals would pay for the device. So, if your device cost
$3K, then $500/rental would be the ticket.. You might want to talk to
the professional TC showmen on the list to get their rates. It seems
that what you are really doing is providing an entertainment service,
not renting a piece of equipment, so you want to charge what the
entertainment is worth (for instance, you can get a clown for $100,
etc.)
> another expence. The best part of this idea is my TC hobby will be tax
> deductable. I could get a friend to pay me $1.00 to watch me run my coil
> for a few minutes and by law I am required to report that $1.00 on my
> federal income tax return. If I made a profit of $1.00 then my TC is an
> income and I can call it a business. By law all business expences are tax
> deductable. If I spend $1000.00 on a coil and make a profit of only $1.00
> its tax deductable. Thats the LAW. Thats a cool idea.
Actually, you don't even have to make any profit. What you have to be
aware of is the distinction between "hobbies" and "businesses", for
which the IRS has a fairly complex set of rules. This is a common
problem in the horse business and the racing business (cars, bikes,
etc.). The key is running it as a business: records, business licenses,
insurance, etc. No law says you have to make money in your business....
> Everyone on the TC
> list could have a friend pay them $1.00 to watch them run there coil then
> report it as income and deduct all the TC expences on the next tax return
> and get a almost free coil in the process.
Not exactly, because what you describe is known as a "straw man"
transaction, and wouldn't establish that you are in business. Been
there, done that, paid the taxes...
> Not much different than a stock
> car which is a money loosing business. Stock car owners are required my law
> to report all income from sponcers and race winnings and all expences are
> deductable. Did you ever wonder how people that race stock cars on a local
> track could afford that expence? Its tax deductable.
See above about record keeping, etc. It can be done, but it is work...
There are books on the subject and accountants who specialize in keeping
you straight with respect to the IRS while losing money.