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"Question: Can burn-outs damage your axles or other components while having traction control on?"
Others have posted that it may not be possible to do a "burnout" with traction control on. This limits the amount of wheel spin and stop any burnout before it even happens.
But assuming a burnout can occur, and it can I'm sure if the driver knows what he's doing.
Every time the car is driven away from a stop stresses the rear axles and the diff gears. The level of stress though is well within acceptable limits, design limits.
A burn out requires a sudden application of power/torque that overcomes the tires' grip and causes them to spin.
This stresses the axles and diff gears even more than they are stressed during a normal take off.
The axles are pretty strong as are the gears. An out right failure is unlikely, and if it happened probably would be due to an inclusion in the metal of the axle shaft or metal of one of the gears or other components in the diff that resulted in a stress point and subsequent fracture.
The added stress also puts a bigger load upon the gear lube. Over time even if there is no component failure there can be increased wear. As someone mentioned this can lead to a noisier diff, at least, and probably if done often enough lead to premature failure of most likely the diff due to the extra wear and tear.
In short there is a cost to burnouts. Ignoring the shortened tire life there is a cost to the drive train. The rear diff will almost certainly have a shorter service life and this life can include more noise, leaking seals,
If you intend to keep the car for a long time budget for a new diff, new axles (the splines will likely take a beating even if the axle shaft itself remains intact), and in general just more items that suffer from wear and tear. If a manual transmission the clutch but also the innards of the transmission. Like the diff a burnout subjects the transmission to higher loads, more stress. The transmission can manifest more noise, or more serious signs of trouble, could possibly even suffer sudden catastrophic failure.
An automatic acts to cushion the impact of a burnout some but remember its gear sets are not as massive as those in the manual transmission so it is all pretty much relative.
If you insist on continuing to do burnouts I would suggest you follow a more aggressive fluid service schedule for both the engine, transmission, and diff. Short of stopping the burnouts this is all you can do to try to hold off the inevitable wear and tear that results.
If you do not plan on keeping the car for very long the effects of the burnouts becomes someone else's problem.