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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.
Previous "Tips of the Month"
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.
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.
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.
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.
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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