July 2010
At the recent University of Kentucky symposium on equine law some of the top tax attorneys expressed great concern over the new aggressive nature of the IRS. Independent contractor status will be closely examined. IRS estimates that FICA taxes are short by $14 billion.
Previous "Tips of the Month"
June 2010
Every Time, Every Ride chronicled head injuries sustained by all ages and experience levels of riders.
Head injuries still occur way too often; the latest was to a dressage Olympian on March 8th , 2010.
May 2010
Driving your 4 or 6 horse rig into some states requires a CDL, (Commercial Drivers License). Don’t let some arcane license requirements spoil your horse showing experience. In other words, check each state traveled.
April 2010
In a "down" economy it is becoming common to find sale horses for "rock bottom" prices or "FREE" for the taking.
ALWAYS insist on the legally transferred registration papers. Remember, those papers are needed for breeding
and "breed-specific" horse shows.
March 2010
NAES has been doing our Certified appraisals for over 30 years but never have we done more “lease horse” appraisals.
If you’re the owner be very specific as to the lease contract. I know you want the horse “out the door” but make sure your attorney takes the time.
February 2010
Tax time is appropriate to review the “passive loss” IRS Code Section 469, enacted in 1986 and blamed for the horse recession starting that year. Demonstrating your deductable “material participation” in the required 7 regulatory tests is paramount; know them!
January 2010
Because of worsening economic conditions police are responding to many more stolen truck reports. Many vehicles mostly high end trucks are stolen from horse show hotels. Always use “The Club” or similar steering wheel blocker.
December 2009
It always amazes me that written contracts aren’t demanded of every “deal.” Even on “small” transactions
…demand them in writing.
November 2009
Horse owners often develop their hobby into a business but so slowly they're unaware they've become a commercial entity.
Always keep your CPA and the requirements of IRS Sec. 183 in mind; it could save you lots of dollars.
October 2009
Your home farm’s horse business may grow so much that the normal homeowner’s insurance won’t take care of claims the insurance company determines to be commercial in nature. Keep the insurance person advised.
September 2009
Are you planning to get an NCAA Equestrian Scholarship under US Title 9 for your post-junior child rider? For kids going to school in the fall it’s probably too late but there may be a “walk-on” as defined by the NCAA; check with the school available.
August 2009
Assuming that your friend won’t sue you when their horse is hurt in your trailer is so naive. Insurance to protect you and a signed release by the horse owner are very important.
July 2009
Operating a boarding stable in a down economy can be rough. Get references from previous boarding stables. If the prospective boarder has been slow before…they’ll do it again. “Trust but verify,” (President Reagan after Reykjavik talks).
June 2009
With the economy in a slump the boarding stable needs to be assured of prompt payment by its boarders. Each state has statutes that address feed or stablemen’s liens; know them well.
May 2009
Because of the US Title 9 requirements for colleges and universities, young women are being welcomed with open arms into schools offering fully paid tuition and board; what an opportunity!
April 2009
Horse association memberships may offer secondary liability insurance. If you’re found at fault in an accident, this insurance may come into play.
March 2009
Horse rescue groups are popping up all over. However, please be prepared to do the most due diligence possible; just because the horse is inexpensive don’t believe everything that’s told to you.
February 2009
As the horse show season begins, its imperative the owner verify items on their horse's entry blanks. The trainer (who often fills them out) may make an error which could penalize the owner.
January 2009
Mission statements for so many horse associations focus on the animal's well being not financial rewards. Your goal should be to always look out for your horse's safety since it aids you as well.
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December 2008
Boarding stable owners have to be expert in their own state’s feed lien laws, (sometimes called agister’s laws). Local attorneys and county clerks usually won’t have the foggiest idea what they require.
November 2008
Equine mortality insurance sometimes gives you the option of a “loss of use” endorsement. Just because your show horse can’t do everything he used to do, doesn’t always mean you collect.
October 2008
Our children and horses are special. Looking out for our horse’s safety means safety for the rider as well. Rules for each sport should be aimed at protecting both.
September 2008
Buying your new show horse requires confirmation that no previous association penalties have been applied. If the horse has been previously “set down” it may mean the horse cannot now compete without a “suspension release.”
August 2008
Because the cost of a lawsuit is so steep make sure your "horse transaction" is memorialized with lawyer-prepared, well-written contracts. The small contract prep charge will be a fraction of litigation expenses.
July 2008
Full disclosure regarding your horse purchase is a necessity. Knowledge and verification of previous ownership, veterinary and show records will prove so helpful should problems occur.
June 2008
As the seller in a horse deal you must be aware of your agent’s actions. Some states can actually charge you with complicity if you know or should have known of illegal actions by your agent.
May 2008
When consulting your lawyer regarding a possible horse-related case, make sure and explain yours and the opposing arguments completely. Your written account of all the facts including names, addresses and phones can save your attorney much in hourly charges to you.
April 2008
Since the horse anti-slaughter acts are being enforced, be very careful to which rescue barn you donate your horse. Verify the conditions and their compliance with IRS Rule 501.(C), 3.
March 2008
The IRS likes to see growth in the value of your horses, (capital appreciation), each year. Significant sales and Certified Appraisals can ease your burden of proof.
February 2008
Section 183 of the IRS ‘s tax code outlines nine items it deems necessary when claiming your horse business deductions, (Sec. 1.183-2). Now’s the time to review them with your CPA.
January 2008
When receiving a veterinary report of a pre-purchase exam make sure you, the prospective buyer, understands the language thoroughly.
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December 2007
Breeding popular stallions has become a very lucrative industry, particularly for the top stallions. However, conformation weaknesses can show up in strange genetically linked qualities which you'll have to pay to get fixed. State statutes do not always require sellers to disclose surgically corrected conformational weaknesses.
November 2007
Your signed boarding contract is very important. Jurisdictions may allow ownership to pass to you after a certain number of days of abandonment or non-payment of past due bills.
October 2007
When discussing a rival’s horses, be careful to not disparage them; it may come back to haunt you in the form of a slander suit from the competitor.
September 2007
Junior riders are often remunerated for horse-related jobs. A problem can occur after they turn amateur and continue those same paid activities. Associations are very strict on amateur vs. professional status; make sure you know the rules.
August 2007
If you board horses on your property it may be a good idea to have vendors such as farriers name you as an additional insured when coming on to your property to shoe your horses.
July 2007
The Bill of Sale is all-important. It is a legal document showing value, ownership (not the registration papers), and is the only document proving your ownership. Always have an attorney draw it up.
June 2007
Secret commissions and hidden profits are prevalent in the horse business; be aware. Insure that you have direct communication with the horse owner.
May 2007
Shopping for horses on the Internet is so simple...but a magnet for fraud. ALWAYS verify information supplied to you. Remember not to believe everything that you read.
April 2007
Horse leases involving the payment of expenses must specify remedies for numerous "what-ifs." Make sure you both agree on what is to happen if the horse dies, gets sick, goes lame, etc.
March 2007
Be sure to draw blood on your new horse's pre-purchase exam to verify there are no forbidden substances as defined by the USEF.
February 2007
EHV-1 herpes virus has now struck some Northern California racetracks. Some of the symptoms can be vaccinated against so forewarned is forearmed. In addition, quarantine any new horse in your barn.
January 2007
When receiving a veterinary report of a pre-purchase exam make sure you, the prospective buyer, understands the language thoroughly.
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December 2006
Before branding your warmblood with a mark, verify through DNA that the breed is authentic.
November 2006
Re-evaluation of your horses for tax purposes is important in maintaining IRS 183 provisions; a Certified Appraisal at year's end can aid your business deductions.
October 2006
Make sure foreign veterinary exams and x-rays are sent for final assessment to your own stateside veterinarian.
September 2006
A previous case of mine involved my client/defendants’ misplacing the appropriate liability waiver, (they are like gold since a signed waiver often precludes suits).
August 2006
Breed registrations, like Quarter Horse, American Saddlebred, etc. are never proof of who actually owns the subject horse; but the bill of sale is.
July 2006
Make sure your vet examines all medical records from the previous owners. They will aid in focusing the pre-purchase examination toward possible soft tissue injuries requiring ultrasound tests.
June 2006
An overseas horse purchase demands due diligence. The US market price and your own vet’s assessment are really what count. NEVER count on a vet in a foreign country to look out for you.
May 2006
IRS Section 183, #3 mentions the importance of "...time and effort expended by the taxpayer in carrying on the activity." Show ring success and time spent aids in marketing your operation and meeting IRS requirements.
April 2006
Hold-Harmless waivers for businesses working with minor children should be signed by both parents. Many states require both parents to sign the waiver. You could be sued by the parent who "didn't" sign.
March 2006
Under Section 183 of the IRS Code, factor #2 looks at "The Expertise of the Taxpayer or His Advisors." Make notes of things you learn to run the horse business profitably.
February 2006
Legally speaking, the general and USEF mandated use of an ASTM-approved helmet just makes sense. Using such head gear goes a long way toward showing your concern for safety. (See GR318.3)
January 2006
Resolve for the New Year to know the particular association rules under which you show. It would be embarrassing to find out at year’s end that points “earned” won’t count because of an oversight 12 months earlier.
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December 2005
When breeding your prize mare be aware that mistakes can be made in assigning the stallion you wish to breed to your horse. Always get a DNA test to confirm the exact parentage.
November 2005
Sending your horse to someone else to sell necessitates a contract spelling out who is responsible for vet bills, showing costs, mortality insurance, etc. A hand shake will not hold up in court.
October 2005
When showing your horse to a potential buyer, demand they wear a helmet especially if the buyer is a minor. For children in NY 14 and under, helmets are mandatory!
September 2005
If you have to “evict” a boarder, it might be a good idea to get a health exam, proving their horse was healthy when it left your care.
August 2005
Make sure each of your guests at your farm signs a waiver before riding one of your horses. Minors MUST wear a helmet and their parents must sign the waiver.
July 2005
Section 183 from the IRS is the “# 1 punch” for your horse business. The “#2 punch” is Section 469, the “Passive Loss” provision which you and your CPA must address.
June 2005
Today, many horses receive feed supplements. Keep track of all ingredients; it may help your vet diagnose a toxic feed problem.
May 2005
Insurance companies are very concerned about your horse barn safety procedures. Having and using a written policy can go a long way in mitigating your liability if and when someone is hurt.
April 2005
Horses purchased overseas are covered by their country's laws which may not stand up to adjudication (if necessary), in a US court. Ask your lawyer to review the sales agreement.
March 2005
IRS audits are handled much easier if you have a pre-approved baseline appraisal on your horses. This gives you and the IRS an idea of what your capital is worth.
February 2005
Hauling someone else's horse? Make sure you have a written agreement absolving you of any responsibility.
January 2005
Closing the sale on your horse requires that "all" the monies come to you first. This enables you to directly pay commissions and fees.
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December 2004
Buying a horse requires another pair of "eyes". Pay your trainer to help; it is well worth the cost.
November 2004
The sale/purchase of your horse, even if inexpensive, ALWAYS requires a written not verbal, legal agreement.
October 2004
When transferring horse ownership always use Certified Mail or a reputable overnight service. By doing so, you will have documented records.
September 2004
Always notify your horse insurance specialist immediately when a new horse is purchased. Your agent will often "bind coverage" over the phone.
August 2004
Unable to find a "horse attorney" near you? Not to worry, an attorney skillful in preparing contracts will do the trick.
July 2004
Full disclosure in the purchase/sale of horses is absolutely imperative. Your trusted trainer should readily agree with this requirement.
June 2004
Unable to find a "Horse Attorney" near you? Not to worry, an attorney skillful in preparing contracts will do the trick.
May 2004
Horse insurance protects you from the loss of your horse. Make sure you know the different "full mortality" or "loss of use" policies.
April 2004
Accurate appraisals are highly dependent on a horse's performance. Always have your favorite horse photographed and videotaped.
March 2004
More judicial agencies are requiring Certified Horse Appraisals. The appraisal from the horse pro down the street will not qualify.
February 2004
Pre-purchase vet exams are important; do not let a seller get by on the less rigorous "insurance" exam.
December 2003 and January 2004
When buying a horse, a legal and binding full-disclosure contract protects both the buyer and the seller.
November 2003
In order to take a tax deduction greater than $5,000 on a donated horse, the IRS requires a certified equine appraisal.
October 2003
Does your CPA fully understand the IRS' Section 1.183? These points will affect your horse business.
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