The Web Cushion » Horse Center http://webcushion.com For a soft landing Wed, 04 Aug 2010 20:11:51 +0000 http://wordpress.org/?v=2.9 en hourly 1 The Equine Equity Act: A Look on Horse Taxation http://webcushion.com/archives/2008/06/10/the-equine-equity-act-a-look-on-horse-taxation/ http://webcushion.com/archives/2008/06/10/the-equine-equity-act-a-look-on-horse-taxation/#comments Tue, 10 Jun 2008 21:43:50 +0000 admin http://webcushion.com/archives/2008/06/10/the-equine-equity-act-a-look-on-horse-taxation/ Kentucky Senator Mitch McConnell, seeking to promote and attract more investors to do business in the horse industry, had introduced the Equine Equity Act a year ago. Co-sponsored by Republican Senator Jim Bunning (Kentucky) and Democrat Senator Blanche Lincoln (Arkansas), the legislation proposed to remove the heavy burdens of racehorse owners by providing tax incentives. It became law when members of the U.S. House of Representatives and the U.S. Senate voted for it, overriding George W. Bush’s Presidential veto of the 2007 Farm Bill, which included the said Act. The legislation allows horse owners to: (1) make their racehorses qualified for capital gains treatment after a period of 12 months; (2) depreciate their race horses over a 3-year period; (3) qualify horses for Federal Emergency Assistance under certain circumstances currently benefiting livestock and crop producers.Formerly, the holding period required for a horse to get capital gains treatment was 24 months. The Equine Equity Act reduces the 35% capital tax placed on gains made from individual sales of horses to 15% after a holding period of 12 months. A shorter holding period gives horse owners the flexibility to sell and market horses.In the past, federal tax codes stated that a racehorse that was trained before reaching 2 years of age will fully depreciate after 7 years while those that began training before reaching the stated age will depreciate over the course of three years. Most racehorses do not race for 7 years. Provisions in the act consider horses depreciated after three years of service, regardless of when they began training. Such provisions provide a more equitable schedule for racehorses.Losses suffered by horse owners during natural disasters are no different compared to livestock and crop producers. The act includes racehorses under the livestock definition, revamping the Agricultural Act of 1949. The inclusion makes racehorses eligible for Federal Emergency Assistance.

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