Senate committee advances favorable tax rules

A U.S. Senate committee has approved a document that would extend tax-depreciation rules that are favorable to horse and farm owners, according to the National Thoroughbred Racing Association, which lobbies the federal government on racing issues.

The U.S. Senate Finance Committee approved the document Tuesday by a 23-3 vote, according to the NTRA. The document will form the basis of a bill that would put the tax rules in place for at least two years, retroactive to the start of 2015.

The rules favorable to horse owners include 50 percent bonus depreciation on any qualified assets purchased and put into service in that tax year. The rule, which has been in place for the past several years to spur investment, applies to all businesses, and horses purchased at auction or in private sales will continue to qualify for bonus depreciation.

The other rule favorable to horse owners is three-year depreciation for all racehorses. Prior to 2008, the value of racehorses was depreciated on a seven-year schedule. But in a farm bill passed that year, the depreciation schedule for racehorses was changed to reflect the typical three-year career of a racehorse. The NTRA lobbied aggressively for the change.