Tax Write Off On Horse - The Horse Forum

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post #1 of 19 Old 03-18-2011, 07:41 PM Thread Starter
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Tax Write Off On Horse

I was wondering what it means when you write a horse off on your taxes. I don't mean like horse expenses I mean and actual horse. I heard of someone doing it a while ago but, didn't know what it meant. Thanks!
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post #2 of 19 Old 03-18-2011, 08:28 PM
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In order to write off a horse, the animal has to be considered a depreciable asset to your business.

For example, school horses are usually insured for a certain amount, and they generate income for the owner. Once a horse is retired or dies, the owner can write off the asset on their taxes as a loss. But only on the amount that hasn't been depreciated.

That's an extremely simplified explanation, but basically how it works.

The average person can't just get a tax write off for their pleasure horse. As a hobby farmer, I don't even qualify for livestock tax exemption status. If I wanted that, I'd have to breed or otherwise use my horses to generate a percentage of my income.

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post #3 of 19 Old 03-18-2011, 09:28 PM
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Heck, I wish I could put my horses, cats and dogs on my tax return! (preferable as dependents because that's what they are indeed )

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post #4 of 19 Old 03-20-2011, 08:09 PM Thread Starter
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Ok, I am still not totally sure as to what happens. The lady I got my horse from was going to write him off on her taxes. Then my trainer told me about him and I ended up getting him. The lady I got him from has a lot of OTTB and he was one that she had for a while and didn't want or need him anymore so she was going to write him off I guess. So if she were able to write him off then where would he go?
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post #5 of 19 Old 03-20-2011, 08:20 PM
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If you are self employed as a boarding business or a trainer or coach, you have to pay taxes on your income (a regular job deducts them automatically). In these circumstances, a horse is nothing more then a product. To write something off means she is applying it as an expense against income earned so she doesn't have to pay tax on that income. For example, gifting a horse could be a tax write off because it's a charitable donation.

It's difficult to tell if she means a genuine tax write off or if she's using it as an illegal tax write off, but it just means she's using his value against her income so she pays less taxes on it.

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post #6 of 19 Old 03-20-2011, 10:23 PM
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Quote:
Originally Posted by MacabreMikolaj View Post
If you are self employed as a boarding business or a trainer or coach, you have to pay taxes on your income (a regular job deducts them automatically). In these circumstances, a horse is nothing more then a product. To write something off means she is applying it as an expense against income earned so she doesn't have to pay tax on that income. For example, gifting a horse could be a tax write off because it's a charitable donation.

It's difficult to tell if she means a genuine tax write off or if she's using it as an illegal tax write off, but it just means she's using his value against her income so she pays less taxes on it.

This. Technically as a trainer/instructor I am independently employed. I write my horses and all of their expenses/equipment off as it is considered a part of my business. While yes, this does sound like a cool idea for those who don't have this option I pay a hefty HEFTY amount in taxes and something called "pre-taxes" since I don't have a paycheck that automatically deducts it out.
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post #7 of 19 Old 03-23-2011, 08:51 AM Thread Starter
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I am sorry I am still kinda of confused. So I am really just wondering what would of happened if I didn't buy my horse and the lady wrote him off on her taxes. What would she do with him? Would he ahve gone somewhere? I guess I keep thinking because she wanted to write him off, she would of gotten rid of him.
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post #8 of 19 Old 03-23-2011, 08:55 AM
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She was probably going to donate him to a school or some type of program. Then she could write him off.

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post #9 of 19 Old 03-23-2011, 03:32 PM Thread Starter
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oh ok thanks..... one last question..... you can't get a tax write off on a horse if it goes to a kill auction or slaughter right? Hope not because that would be awful!
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post #10 of 19 Old 03-23-2011, 03:39 PM
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Sure you can. The IRS doesn't differentiate between selling to a private individual versus a kill buyer. The asset is no longer on your books, regardless of where it went.

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