By T. D. Thornton
Two pieces of federal legislation to incentivize investments in Thoroughbreds were reintroduced Apr. 27 by United States Reps. Andy Barr and Morgan McGarvey, both of Kentucky.
The Race Horse Cost Recovery Act of 2023 would make the three-year depreciation schedule permanent for racehorses, regardless of their age when put into service. Currently, Congress must reauthorize this provision in the tax law on an annual basis.
The Racehorse Tax Parity Act would reduce the holding period for equine assets to be considered long term capital gains, putting them on a level playing field with other similar assets.
Both bills would require amending the Internal Revenue Service code of 1986.
Barr had introduced similar versions of the Cost Recovery and Tax Parity acts on at least three previous occasions dating to 2015, but no voting action was ever taken.
The full text of the new versions of the bills was not available at deadline for this story.
According to a press release from Barr's office, the bills are endorsed by the National Thoroughbred Racing Association (NTRA), the Kentucky Thoroughbred Association, the Thoroughbred Owners and Breeders Association, Keeneland Association, the American Horse Council, and The Jockey Club.
“Permanently delivering these tax incentives for owners and breeders will strengthen investment in our signature equine industry,” said Barr, who serves as co-chair of the Congressional Horse Caucus.
“This legislation will deliver much-needed tax incentives for owners and breeders, fostering growth and investment in this critical industry and ensuring Kentucky remains the horseracing and breeding capital of the United States,” said McGarvey.
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