Merry Christmas and Happy Holidays to everyone. Enjoy time with your family and loved ones.

NTRA Report From Capitol Hill

December 16, 2015

THREE-YEAR TAX DEPRECIATION FOR RACEHORSES, OTHER INCENTIVES POISED FOR MULTI-YEAR EXTENSION BY CONGRESS

LEXINGTON, Ky. (Wednesday, December 16, 2015) – Important tax incentives for horse owners including a key provision that extends three-year tax depreciation for all racehorses through 2016 were finalized late on Tuesday by Republican and Democratic negotiators in the House as part of comprehensive budget and tax legislation which Congress will likely pass to conclude the year.

Maintaining the three-year recovery period for racehorse purchases has been a top legislative priority for the National Thoroughbred Racing Association (NTRA) since the provision’s initial enactment as part of the 2008 Farm Bill. Most recently, the NTRA successfully secured inclusion of three-year depreciation in the 2014 tax extenders package that expired at the end of 2014.

“A multi-year extension of three-year tax depreciation for racehorses is welcome news for Thoroughbred owners and breeders,” said Alex Waldrop, NTRA President and CEO. “Accelerated cost recovery encourages investment and creates jobs in Thoroughbred racing while the multi-year extension of this tax incentive helps owners plan for the future.”

The provision allows taxpayers to depreciate, on a three-year schedule, racehorses 24 months of age and younger when purchased and placed into service, as opposed to a seven-year schedule. The accelerated schedule better reflects the length of a typical racehorse’s career and is more equitable for owners.

The comprehensive budget and tax legislation will also retroactively extend two other provisions that spur investment in racehorses and depreciable farm equipment.

“Bonus depreciation” will remain set at 50 percent and may be used by business owners who purchase and place in service qualified new depreciable property. Yearlings that an owner purchases and puts into a training program are one example of eligible property. Bonus depreciation is set at 50% for 2015, 2016 and 2017, at 40% for 2018 and at 30% for 2019.

The “Section 179 expense allowance” will be set at $500,000, with a $2 million threshold for qualified new or used property purchased and placed in service by small business owners in many industries. Total purchases of qualified property that exceed $2 million reduce the taxpayer’s expense allowance dollar for dollar. Broodmares may be eligible for expensing and are an example of used property because of their prior use as a racehorse or broodmare. The comprehensive budget and tax legislation will make the Section 179 expense allowance incentive permanent at this level.

The NTRA will update the industry on the progress of this legislation as it makes its way to the President’s desk for signature before the year’s end.

Contact SupportHorseRacing.org NTRA.com

As the year is coming to an end  the stable is racing mostly here in Kentucky at Turfway Park. Racing is pretty sparse right now in the Midwest. The only tracks running are Mahoning Valley in Youngstown Ohio,  Hawthorne in Chicago and Turfway Park in Florence, KY.  You can go to the deep south in Florida and New Orleans. In the next ten days we will take some to Oaklawn in Hot Springs, Arkansas. They open January 15th for their first day of racing. Bottom purse is $23,500 for $5000 claimers. A lot of claiming goes on at Oaklawn Park.

I attended the Racing commission meeting in Indiana yesterday. It was more positive than any meeting I have been to since they legalized the slots. They approved next years racing schedule which will be roughly the same amount of days. There are some definite improvements on the Indiana Bred side of the program. In the past they have had 20 stakes for Indiana Bred horses at $85,000 and next year the 20 stakes will all be at $100,000. A nice increase. Also, there will be an estimated 48 more Indiana Bred races at a minimum claiming price of $10,000 or more next year. Those same races will have an additional purse increase of $1000 per race. This is a pretty big step forward. Good news for us as we have a good group of Indiana Bred Yearlings and weanlings. We would gladly take on some partners if anyone is interested in taking advantage of these purse increases and additional racing opportunities being offered in the upcoming Indiana Grand Race meet. If you would like some more information on what we have available, let me know and we can forward pedigree’s and prices. There are advantages to purchase before year end as you can start depreciating in 2015.