 K-1
At Fantasy Lane Stable we leave nothing to chance. On or before March 1st each season we provide each partner with an individual K-1 from the preceding year mailed directly to you from our CPA (Certified Public Accountant).
FLS management elects to depreciate newly purchased unraced two-year olds over the course of three annual installments instead of taking the legally acceptable (IRS 179) accelerated depreciation in the very first year.
The reason is that we gear everything to the horse(s) three-year old campaign with those large, restricted purses offered only for three-year olds. We prefer to save the depreciation as a write-off against future purse earnings where it would be most useful. To use 100% depreciation at age two, without enough basis, doesn't warrant such a move. It is our financial advisor's opinion that to use accelerated depreciation would not serve the best interests of the majority of partners.
In accordance with current IRS regulations, if you are an active partner, you should be able to write off all of your investment including, but not limited to, your expenses to watch your horse(s) train and race against your other ordinary gross income.
We are constantly communicating with our many partners in the form of e-mails. We welcome phone calls to discuss the day-to-day training, as well as to answer any and all questions you may have. As we said, we leave nothing to chance.
Not only is Fantasy Lane Stable fun and exciting but we feel an obligation to continuously educate our partners about the business end of owning thoroughbred racehorses. There are never any stupid questions, only dumb answers if we ever fail to address your concerns.
In this regard, we have been universally praised from our many partners who have been with other organizations. Our communication skills separate us from our competitors in that we treat all of our partners with respect and first class service which you most truly deserve.
 Bill to Benefit Horse Owners
Thursday, May 8, 8:38 pm
From the National Thoroughbred Racing Association
House and Senate conferees for the 2007 farm bill announced May 8 they had approved a final version of the bill, which includes legislative language to amend the depreciation schedule for race horses. The final version of the farm bill is expected to pass both houses and be sent to the president for approval.
Under current tax law, race horses are depreciated over either three or seven years, depending on their age when "placed in service." A horse is generally deemed to be placed in service when it begins training. Horses over the age of 24 months (from date of foaling) when placed into service are depreciated over three years; otherwise, they are depreciated over seven years.
Legislation contained in the 2007 Farm Bill allows an owner to recover his or her costs over the period of time that the horse is likely to race.
"This provision will provide enormous economic incentives to the horse racing and breeding industry and also bring more fairness to the tax treatment of one of the most important assets in our industry--the race horse," said Alex Waldrop, president and CEO of the National Thoroughbred Racing Association. "A simplified, uniform depreciation schedule for race horses will help keep buyers in the market for racing bloodstock and improve the overall economics of horse racing and breeding.
“The NTRA and the whole horse industry owe a significant 'thank you' to Kentucky's senior senator Mitch McConnell for his steadfast leadership on this important issue, which is critical to Kentucky's signature agribusiness. We also thank Senator Blanche Lincoln, Rep. Dennis Cardoza, and other members of congress who supported this legislation."
According to "The Economic Impact of the Horse Industry on the United States," produced in July 2005 by Deloitte Consulting, the horseracing industry carries a total economic impact of $26 billion, $20.7 billion of which is from Thoroughbred racing. There are nearly 845,000 racehorses in the United States and the racing industry supplies more than 380,000 jobs.
DISCLAIMER
Fantasy Lane Stable does not advise on any personal income tax requirements or issues. Use of any information from this email, our site, or any other website referred to is for general information only and does not represent personal tax advice either express or implied. You are encouraged to seek professional tax advice for personal income tax questions and assistance.
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