How To Make A Horse Racing Partnership Work For You
Maybe you are giving some consideration to joining a horse racing partnership or syndicate, or possibly you are already actively involved? If either is the case, it’s vital you quickly familiarize yourself with how to set up all your records correctly so that you keep a complete track of your share and find yourself fully prepared for tax time or other financial necessities.
If you want the IRS to treat your horse racing activities as a business then you must conduct your dealings in a businesslike manner. To get a proper start, before entering into any partnership you should have a clear picture of both what you expect and what the syndicate is bringing to the table. A business plan can outline what you are looking for in a syndicate and what you expect to see from your investment. Some of the things that should be included in your horse racing partnership business plan are:
* Where you plan to obtain the funds necessary to make both the initial investment in a horse racing partnership and to cover the monthly expenditures.
* 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.
* Projected income and operating expenses.
* Mark out framework within which the partnership will function, specifically, do you want a horse that will be competitive at a national level or would you be more comfortable racing locally.
* Be specific regarding insurance for your purchase, for example liability, serious injury and mortality insurance.
* Does the contract provide a clause allowing you to get out of the partnership?
As well as a good business plan, you should also learn how to organize your business correctly, accounting for all income and expenses. Important guidelines you need to follow so that your business runs smoothly 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.
* Keep an appointment book and travel log to document appointments, visits to the racing stable, phone calls, any travel, all associated mileage, etc.
Using a good plan of action, anyone can become involved in horse racing with clearly defined desires and methods. You will then be in the perfect position to pick the right horse racing partnership. You will also be equipped to carefully track and record all your equine tasks effectively, thus preparing you for tax time. Preparedness will ensure that things run smoothly and that will leave you free to really take pleasure in your brand new racehorse!