From NTRA
WASHINGTON, D.C. (Oct. 24, 2019) — U.S. Representative Andy Barr (R-KY) re-introduced the Race Horse Cost Recovery Act (H.R. 4786) that would renew three-year race horse depreciation, an important tax provision for the horse racing industry that expired in 2017. Three-year depreciation would become permanent under the new legislation.
“We thank Congressman Barr for filing legislation this week that would make three-year depreciation available to all race horse owners,” said Alex Waldrop, NTRA President and CEO. “This is a much-needed option because it ensures that the tax code will continue to allow businesses in the horse racing industry the flexibility to make decisions about their capital assets in a manner that is consistent with the true economics of their business. This is precisely what the tax code strives for with respect to assets used in other types of businesses.”
Three-year race horse depreciation was most recently available to the industry in 2017 but Congress did not renew it for 2018 as part of the Tax Cuts and Jobs Act (TCJA) passed in December 2017. The TCJA did include 100% bonus depreciation and a $1 million Sec. 179 expense allowance for qualified depreciable property, two important investment incentives that lessened the need for three-year depreciation in many cases. However, three-year depreciation continues to be a beneficial option for many racehorse owners, especially racing partnerships with multiple passive owners, as it better aligns deductions with corresponding income opportunities on an annual basis.
The NTRA federal legislative team will pursue passage of three-year depreciation through this legislation as we have done since the provision’s original inclusion in the 2008 Farm Bill.