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house Bill H.R. 1804

Should the Three-Year Depreciation Schedule for Race Horses be Permanent?

Argument in favor

Race horses usually only compete for a few years before they’re retired, so a three-year depreciation schedule more accurately reflects their useful life for tax purposes than the old seven-year schedule.

Jason's Opinion
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05/06/2017
This has nothing to do with politics, why is this question even here?
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MAvet75's Opinion
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05/06/2017
Why is this really a federal government issue? Seriously, this seems pointless for our reps and senators to be involved in.
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operaman's Opinion
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05/07/2017
Horse racing is not my bailiwick. However, I do enjoy watching horses run or gallup. If you think of a race horse as a business vehicle, the IRS has established a depreciation schedule, so three years may be appropriate for race horses. Horses can live up to 20 years, but race horses not so much. They are feed well and doctors, but worked hard. But we're not discussing race horses, we're talking big business. In many cases, studhorse fees can be lucrative. Horse breeding, boarding, training, housing and transportation cost money. These magnificent animals need a good home after retirement with lots of pasture, love and care.
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Argument opposed

Owners should have to depreciate their race horses over a seven-year schedule, and the current three-year schedule should be allowed to sunset. Letting that happen could lead to additional tax revenue.

Karen's Opinion
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05/06/2017
Just another tax write off for the well off. If you can afford a race horse, you shouldn't be able to take a depreciation at all. UNLESS, I can depreciate my cat. Then I'm all in.
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Tracey's Opinion
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05/06/2017
Horses are animals with feelings. Race horses in particular are started under saddle way too young. They are raced if successful and often sold to slaughter if they aren't. These Animals are not some stupid deduction for the idle rich.
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Manuel's Opinion
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05/06/2017
Why is the American public subsidizing race horses?
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What is House Bill H.R. 1804?

This bill — known as the Race Horse Cost Recovery Act — would make permanent a provision in the tax code that allows race horses which are put into service before the age of two to be depreciated over a three-year, rather than a seven-year schedule. Currently the tax code allows race horses to be depreciated using a three-year schedule, but the provision isn’t permanent law so Congress has to renew or else it will sunset and revert to the old seven-year schedule.

Impact

Race horses and their owners; and the IRS.

Cost of House Bill H.R. 1804

A CBO cost estimate is unavailable.

More Information

In-Depth: Sponsoring Rep. Andy Barr (R-KY) also introduced this legislation during the last session of Congress, when the three-year depreciation schedule for race horses was renewed temporarily once again, saying at the time:

“Providing the certainty of a three-year depreciation schedule is critical to the health of Kentucky’s signature horse racing industry, as well as job growth in other horse-related industries. That’s why I am proud to introduce [this bill] to make permanent the three-year depreciation schedule, which will encourage more job creation and investment in Kentucky’s signature equine industry, and end the uncertainty of the current, temporary depreciation schedule for race horses. Kentucky’s horse industry contributes $4 billion annually to our economy and provides over 80,000 direct and indirect jobs to Americans. We must protect this investment and these jobs for the sake of Kentucky’s hard-working families.”



Media:

Summary by Eric Revell

(Photo Credit: Bill Brine via Flickr / Creative Commons)

AKA

Race Horse Cost Recovery Act of 2017

Official Title

To amend the Internal Revenue Code of 1986 to allow a 3-year recovery period for all race horses.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
  • The house has not voted
      house Committees
      Committee on Ways and Means
    IntroducedMarch 30th, 2017
    This has nothing to do with politics, why is this question even here?
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    Just another tax write off for the well off. If you can afford a race horse, you shouldn't be able to take a depreciation at all. UNLESS, I can depreciate my cat. Then I'm all in.
    Like (157)
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    Horses are animals with feelings. Race horses in particular are started under saddle way too young. They are raced if successful and often sold to slaughter if they aren't. These Animals are not some stupid deduction for the idle rich.
    Like (74)
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    I literally cannot think of anything that matters less.
    Like (34)
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    Why is this really a federal government issue? Seriously, this seems pointless for our reps and senators to be involved in.
    Like (32)
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    Why is the American public subsidizing race horses?
    Like (30)
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    Who cares and what the heck does this have to do with anything that matters in this country!
    Like (28)
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    The sport of kings. A decision to race a horse at a young age is a choice that owner makes knowing that generally the horse isn't fully developed physically and will reduce the horse's productive life. Imagine knowingly putting a new race car on the track without lubricants. The car preparation would be incomplete and the mechanics would expect an early break down. Would that change the method of depreciation over the life of the car? That would intentional destruction. By allowing depreciation over a period of three years it would bring the book value of the horse to zero at the end of that period and then it would be a one way trip to the dog food factory. The expense of raising the horse to maturity would be avoided. A good trainer usually knows which horse may have a chance of winning races. This would turn the equivalent of a puppy mill churning out horses that had been depreciated to a value of zero but had been used by the owners as a tax loss to reduce stable profits. Then the owner would turn around and sell the horse for dog food at a profit. This would be done over and over again and would be of great value to the rich stable owners as a cash crop. Although horse racing is exciting and the famous horses are well treated that leaves the larger number that are never heard of except in famous dog foods. No, if their going to be in the business let them at least give the horse seven years before being fully depreciated. Of course the stable will still sell young horses but this way at least it will make the behavior less profitable.
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    When do we stop funding pork barrel projects? Remember that this is a tax break coming from the US taxpayers, decreasing revenue that we need for roads, social programs and other projects.
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    I found myself thinking pretty much what Countable member MJDalio said: "Who cares and what the heck does this have to do with anything that matters in this country!" I mean, I love horses, but this bill is further proof that we need to scrap the current tax code and replace it with Sen. Ted Cruz's Flat Tax plan!
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    This is a hobby shouldn't be depreciable
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    Yet again, spending your time catering to the wealthy while regular Americans do without basic necessities
    Like (15)
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    Horse racing is not my bailiwick. However, I do enjoy watching horses run or gallup. If you think of a race horse as a business vehicle, the IRS has established a depreciation schedule, so three years may be appropriate for race horses. Horses can live up to 20 years, but race horses not so much. They are feed well and doctors, but worked hard. But we're not discussing race horses, we're talking big business. In many cases, studhorse fees can be lucrative. Horse breeding, boarding, training, housing and transportation cost money. These magnificent animals need a good home after retirement with lots of pasture, love and care.
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    Horse racing is a terrible and damaging sport and humans should stop doing it.
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    Wow! Another bill for the wealthy. I'll let you depreciate your race horse if I can claim my pets as dependents!
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    I say nay. This is just yet another attempt on the part of the GOP to keep cash in the pockets of the super wealthy by lowering their costs (for the upkeep of the animals) and lowering their tax debt while simultaneously further limiting availability for much needed public services for the rest of us. Additionally, if it takes 7 years for a horse to be fully "depreciated" instead of only 3 perhaps some of these beautiful noble animals will get to live a few more years before being callously disposed of.
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    Table this until more pressing issues are resolved, like how to avoid nuclear war with North Korea!
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    Race horses are not retired.. they are killed. Only those who have performed well on the track, very well on the track, survive. Racing it putting horses into "service" is physically punishing on the horses leading to many physical injuries and I am certain people who invest in them already claim their injuries as losses o. Their taxes. Horses are living beings not mere assests and to allow them to be written off at a faster rate puts them into the category of expendable and lowlier than an oven or washing machine used in a rental property.
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    Are you kidding me? This bill is coming from Kentucky. They just held the Kentucky derby. Average ticket prices are $700-$835. $200 for soggy exposed grass seating and $3000-$4000 for "Millionaires row" The hell? The GOP just don't care. Their vision of the US is one where they get to make things easier for their rich friends who in turn throw them campaign contributions for helping them out. Corrupt to the core on all levels. Vote no! This might seem like a tiny ding, but it's just another piece of legislation in a death by a thousand cuts strategy in the class war between the rich and everyone else. The rich should not get special tax breaks for their leisure activities.
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    Anyone who can afford a race horse doesn't need yet another tax break.
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