|Tuesday, August 02, 2005||Contact: NTRA|
|Legal proposals to support U.S. horse industry|
Last week, Kentucky Senator Mitch McConnell introduced a proposal for new legislation, the Equine Equity Act.
The law aims to promote investment in the horse industry by reducing the capital gains holding period for horses, allow owners to depreciate all racehorses over the same period of time, and make horses eligible for federal disaster assistance.
The National Thoroughbred Racing Association, IFHA member in the U.S., very much welcomes the initiative as a vital element to support the horseracing industry.
The new legisaltion would allow horse owners to benefit a reduced tax level (15% as opposed to the normal 30%) if they have held a horse for 12 months. Currently, a reduced rate is only applicable if a owner holds a horse for 24 months.
According to the horse industry, a reduction of the holding period by half would give horse owners and breeders more flexibility to sell and market their horses. Every sale of a horse which is held for at least 12 months would qualify as a capital gain or loss unless the horse is held primarily for sale.
The new law would also allow owners to depreciate all of their horses over three years regardless of when they begin training. Currently, horses that begin training at the end of their yearling year are depreciated over seven years even though most may not race that long.
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