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Economic Stimulus Act Benefits U.S. Horse Owners


February 18, 2008     E-mail this page to a friend!

On February 14, President Bush signed into law a sweetheart of a valentine for horse owners (and others in the industry who have large capital outlays) in the United States.

Two of the tax incentives in the new package directly assist people in the horseracing industry. According to an advisory that the National Thoroughbred Racing Association (NTRA) distributed, two of the incentives will increase the write-off for horses and other property that is purchased and put into service during 2008.

One incentive increases the expensing allowance from $128,000 to $250,000 for horses purchased and put into service in 2008, and for farm equipment and most other depreciable property bought and used during the year. (Different conditions apply once an individual has tallied $800,000 in eligible property. For all tax-related issues, TRJ encourages you to consult with a tax professional or contact the Internal Revenue Service.)

Another incentive allows a 50% first-year bonus depreciation for horses and most other depreciable property purchased and in service in 2008, but does not apply to property that has a depreciation life of over 20 years. This is a renewal of a similar bonus depreciation incentive that was offered in 2003 and 2004. As before, the property must be new, and the original use of the horse or property must begin with the taxpayer. That is, for a horse to be eligible, it cannot have been used for any purpose before the taxpayer purchased it. (Again, consult with a tax professional for details.)