Auto racing team gets a green flag

When businesses dispose of assets, gain or loss must generally be recognized on tax returns, depending on the nature of the disposition (by sale, exchange, or involuntary conversion). In a private letter ruling, the IRS approved how a Formula 1 auto racing team handled its auto parts disposition for gain and loss purposes. Due to the unique nature of auto racing, the IRS ruled that each part used to build race cars for each specific race was the appropriate asset to be valued for disposition purposes. (PLR 201710006)