Tax break for owners approved for 2014

U.S. legislators have approved a tax break allowing racehorse owners to continue to use a three-year depreciation schedule, a retroactive provision that was being pushed by racing lobbyists.

The provision, which will apply to the 2014 tax year, was one of hundreds of special-interest tax breaks contained in a bill protecting benefits that expired at the end of 2013. The bill extends the tax breaks for one year. Any longer extension would have likely resulted in a veto by President Barack Obama.

Lobbyists employed by the National Thoroughbred Racing Association have been pressing legislators in horse-friendly states to support the provision, which reduces the usual depreciation schedule from seven years to three years, resulting in enormous tax benefits.

“The renewal of three-year tax depreciation for racehorses indicates that lawmakers understand the contributions our industry makes to job creation and the country’s overall economic health,” said Alex Waldrop, the president of the NTRA, in a statement.

The bill also retroactively extended two tax provisions that can be used by horse owners. The first, bonus depreciation, allows taxpayers to depreciate 50 percent of the purchase price of property in the first year of an asset being placed into service, a benefit that has been used by buyers of yearlings. The other extends an expense allowance.