NTRA Reminds of Tax Incentives for Yearling Buyers

As the 2010 yearling sale season continues, the NTRA’s legislative team reminds buyers of existing tax incentives that make this a tremendous year to purchase a young racehorse.

$250,000 Expensing Allowance

The “Hiring Incentives to Restore Employment (HIRE) Act of 2010” contains a provision that extends higher small business expensing through 2010 and allows these businesses to write-off up to $250,000 of qualifying depreciable property (such as a yearling). This benefit to encourage investment by small businesses expired at the end of 2009 but was reinstated for purchases made in 2010. Next year, the expense allowance is scheduled to drop to $25,000. Read more here.

Faster Depreciation

The Farm Bill includes a depreciation provision that benefits the equine industry. Starting in 2009, young racehorses (those 24 months and younger when placed into service) began to be depreciated on a faster schedule that better reflects the time over which a horse is likely to race. Click here for details.

Note: Buyers may be able to combine the expensing allowance and faster depreciation tax benefits.

Please consult your tax professional for more information.