by C. Anne Baker

Is it possible that you are thinking about signing up in a horse racing partnership or syndicate, or maybe you’ve already done so? Whichever, it’s extremely important that you learn how to set up your own interest correctly so that you will be in possession of all the necessary accounting and documents when your annual tax time rolls around.

It’s assumed that you will expect the IRS to view your horse racing involvement as a business, so it’s necessary that you manage your share in systematic and professional way. To begin correctly, ahead of committing to a partnership, you should form a precise representation of not only your expectations, but exactly what the partnership is providing for you as well. A well written business plan should summarize your expectations for the syndicate and what you hope to achieve with your venture. Listed are points that you will need to incorporate into your horse racing partnership business plan:

* Exactly how you expect to acquire the finances needed, first for the original purchase into the horse racing partnership, and then to pay the monthly outgoings.

* A time frame for the partnership, how long is the contract, 1 year, 4 years, etc.

* Manner in which the partnership horse will be purchased: by auction, out of a claiming race, or by private purchase.

* An estimate of anticipated winnings and also costs.

* Spell out the limits whereby the partnership will work, for instance, do you hope to race nationally or would you prefer to remain local.

* Define your expectations for insuring your investment, (i.e. liability and mortality insurance).

* Is there a clause in the contract so you can get out of the partnership should you choose to do so?

Looking beyond a business plan, it will be necessary for you to construct your business appropriately, recording income and expenditures. Some points you should consider when setting up your books are:

* Hire an accountant knowledgeable in the field of horse racing partnerships.

* Open a new checking account restricted to transactions covering your share in the horse and name it accordingly – Elizabeth Jones dba Jones Racing, LLC.

* Keep all bills, receipts, check stubs from winnings, etc. that relate to your horse racing partnership activities.

* Establish an engagement book and travel log and carefully record all mileage to and from the track, phone calls, appointments, etc.

With just a little forethought, it’s fairly easy to involve yourself in the “Sport of Kings” with specific prospects and arrangements, which will guide you toward selecting the horse racing partnership that’s right for you. You will also be set up to record all your tax related activities methodically. Good preparation eliminates issues and headaches, all of which will contribute to your increased enjoyment in your racehorse ownership!

About the Author:
C. Anne Baker’s life has included thoroughbred horseracing and breeding for many years. She also contributes to horseracing charities. For a limited period, visitors to her web site PartnersInThoroughbreds.com can receive her notable report Becoming included A horseracing Partnership

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