Tax parity bills for racehorse owners introduced in Congress

By: THA

Posted: March 30, 2017

Republican U.S. Rep. Andy Barr of Kentucky, who chairs the Congressional Horse Caucus, has introduced three bills that would enact reforms to the federal tax code that would encourage additional investment in the horse industry.

In a release, Barr’s office said the reforms “are needed to reflect the realities faced by participants in the horse industry and to provide a level playing field between equine investments and other forms of investments.”

The bills for the most part would make permanent tax changes that have been adopted on a year-to-year basis but expired at the end of 2016.

The Race Horse Cost Recovery Act would permanently reschedule racehorses that are put into service before the age of 2 into the three-year depreciation asset class. Barr said the change is needed because the three-year depreciation schedule better reflects the useful life of racehorses as opposed to the seven-year schedule.

The Equine Tax Parity Act would reduce the holding period requirement from 24 months to 12 for equine investments, allowing equine investments to qualify for capital gains tax treatment on equal terms with similar types of assets.

The Race Horse Expensing Certainty Act would allow all investments in racehorses to be immediately expensed consistent with Section 179 of the Internal Revenue Code. The bill would provide clarity and certainty within the tax code that all equine assets are available for Section 179 expensing.

The administration of Republican President Donald Trump has expressed interest in broad tax reform legislation. The status of that effort is uncertain.

“Congressman Barr has once again demonstrated his dedication to the Thoroughbred industry by introducing these pieces of tax legislation,” NTRA President and Chief Executive Officer Alex Waldrop said in a March 30 release. “The NTRA and its federal legislative team look forward to working with Congressman Barr to pass this and other federal legislative and regulatory measures as part of our overall agenda in the 115th Congress.”