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Equine Tax Update - Coming Down the Track

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The Green Group
April 12th, 2014

There are two items which will greatly benefit you and the industry.

  1. The Veterinarian Medicine Mobility Act

This will allow veterinarians to transport, administer and dispense controlled substances and medications while outside of their registered offices and hospitals.

This will ensure our equine veterinarians the ability to provide their professional services to farms, training facilities and race tracks.

As we in the business know, many times it is impossible to bring horses to clinics or hospitals.

The Senate had passed its version earlier this year and now this bill goes to the House for consideration.

 

  1. Tax Extender Bill

This permits the extension of favorable provisions of the tax law as it pertains to the horse industry.  The Senate Finance Unit has just approved the Tax Extender Bill.

This Bill includes several provisions important to our industry.

Background

At the end of both 2012 and 2013, respectively, a number of favorable tax provisions for horse owners, breeders and businesses expired.  The 2012 provisions were subsequently extended in 2013, but expired 12/31/13.

  1. The Extender Bill would reinstate the three year depreciation for racehorses placed in service after December 31, 2013 through 2015.  If not extended, a 7 year life would be applicable for some purchases.
  1. The Bill would raise the so-called Section 179 business expense deduction back to $500,000.  This extension would go for the next two years.  Basically, this would allow anyone in the horse business to immediately depreciate up to $500,000 of the cost of any investment in business related assets, including horses purchased and placed in service during the year.

This deduction would be adjusted if over $2,000,000 of investment was purchased.  If this provision is not adopted for 2014, $25,000 is the limit versus $500,000.

  1. If this Bill is adopted, it will also restore the 50% bonus depreciation for qualifying new property used, including assets used in the horse business, such as horses and other equipment.  The initial use of the horse or equipment must begin with the taxpayer.  This provision would go through 2015.
  1. Finally, the Extender Bill would restore favorable tax treatment for land donated by farmers for conservation purposes.

Bottom Line

If you have any questions, please contact us.

The Green Group is one of the leading tax and consulting firms in the equine industry.  We have over 400 clients involved in the equine industry, including owners, pin hookers, farm owners, veterinarians, trainers and people who supply services to the industry. 

The firm offers a one hour fee consultation service to anyone in the thoroughbred business. 

This consultation includes review of tax returns and business plans.

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Taxonomy: 

There are two items which will greatly benefit you and the industry.

  1. The Veterinarian Medicine Mobility Act

This will allow veterinarians to transport, administer and dispense controlled substances and medications while outside of their registered offices and hospitals.

This will ensure our equine veterinarians the ability to provide their professional services to farms, training facilities and race tracks.

As we in the business know, many times it is impossible to bring horses to clinics or hospitals.

The Senate had passed its version earlier this year and now this bill goes to the House for consideration.

 

  1. Tax Extender Bill

This permits the extension of favorable provisions of the tax law as it pertains to the horse industry.  The Senate Finance Unit has just approved the Tax Extender Bill.

This Bill includes several provisions important to our industry.

Background

At the end of both 2012 and 2013, respectively, a number of favorable tax provisions for horse owners, breeders and businesses expired.  The 2012 provisions were subsequently extended in 2013, but expired 12/31/13.

  1. The Extender Bill would reinstate the three year depreciation for racehorses placed in service after December 31, 2013 through 2015.  If not extended, a 7 year life would be applicable for some purchases.
  1. The Bill would raise the so-called Section 179 business expense deduction back to $500,000.  This extension would go for the next two years.  Basically, this would allow anyone in the horse business to immediately depreciate up to $500,000 of the cost of any investment in business related assets, including horses purchased and placed in service during the year.

This deduction would be adjusted if over $2,000,000 of investment was purchased.  If this provision is not adopted for 2014, $25,000 is the limit versus $500,000.

  1. If this Bill is adopted, it will also restore the 50% bonus depreciation for qualifying new property used, including assets used in the horse business, such as horses and other equipment.  The initial use of the horse or equipment must begin with the taxpayer.  This provision would go through 2015.
  1. Finally, the Extender Bill would restore favorable tax treatment for land donated by farmers for conservation purposes.

Bottom Line

If you have any questions, please contact us.

The Green Group is one of the leading tax and consulting firms in the equine industry.  We have over 400 clients involved in the equine industry, including owners, pin hookers, farm owners, veterinarians, trainers and people who supply services to the industry. 

The firm offers a one hour fee consultation service to anyone in the thoroughbred business. 

This consultation includes review of tax returns and business plans.