Horse Racing

[skhyatt]

Have a potential client that says he has had a business for the last ten years where he races horses. Is there anything special I should be on the lookout for in this situation?

[Brian EA]

Nothing special. Schedule C income. Horses are depreciated -- 7 year property

That's basically it. I also have my first one for the year.
The client told me that his accountant charged him $1500 to do the return and he always has to file an extension. He would like to know if I can do it for about $500.
I asked him to bring in his last 2 years return. I rechecked them. Seems to be Ok .So I will see him next week.

brian

[sea-tax]

Have a potential client that says he has had a business for the last ten years where he races horses. Is there anything special I should be on the lookout for in this situation?

Yeah look at the HOBBY LOSS RULES In the TTB and pubs. TTB PAGE -5-19

I had a client who runs a racing horse business and was audited last year he had deducted a 45k loss on his sch c. We got a no change audit. The auditor initially was licking his lips at the thought of ripping my client apart. However my client had all his ducks in a row. He had a business license , good set of books, business plan, operated like a business by changing trainers and not just sitting back and taking the losses. He proved to the auditor in about 20 minutes that this was a serious thing. The auditor basically threw his hands up and said I will go look somewhere else. I was pretty proud, that my client had listened all those years to my advice and actually followed it. He is now a client for life.

[equinecpa]

Nothing special. Schedule C income. Horses are depreciated -- 7 year property

brian

Racehorses older than 2 when put in use -depreciated over 3 years
Racehorses less than 2 when put in use- depreciated over 7 years

Do be sure to follow sea-taxes advice about good books, business plans etc.

[veritas]

Special

would be showing a profit.

[Black Bart]

Congratulations.

Yeah look at the HOBBY LOSS RULES In the TTB and pubs. TTB PAGE -5-19

I had a client who runs a racing horse business and was audited last year he had deducted a 45k loss on his sch c. We got a no change audit. The auditor initially was licking his lips at the thought of ripping my client apart. However my client had all his ducks in a row. He had a business license , good set of books, business plan, operated like a business by changing trainers and not just sitting back and taking the losses. He proved to the auditor in about 20 minutes that this was a serious thing. The auditor basically threw his hands up and said I will go look somewhere else. I was pretty proud, that my client had listened all those years to my advice and actually followed it. He is now a client for life.

A nice feeling, isn't it? It's very satisfying and gratifying to earn a customer's admiration.

[sea-tax]

A nice feeling, isn't it? It's very satisfying and gratifying to earn a customer's admiration.

Actually BB it is , I think often times we as prepares focus on the "bad clients" and forget that 99% of our clients really appreciate us and listen to what we have to say. I know that sometimes in the heat of tax season I can have a bad day where I might focus on that 1% , I just have to keep telling myself that not all clients are like that.