Steps To Making A Horse Racing Partnership Succeed For You
Are you considering becoming involved in a horse racing partnership or syndicate, or are you already an active partner? If so, it is crucial to know how to get started properly in order to keep track of your partnership share and be prepared when you have to give an account of your records for yearly tax preparation or other purposes.
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:
* Your strategy for providing the required funds, both for the original horse racing partnership investment, and then to meet the monthly bills.
* A best estimate that the partnership’s length, the duration of the contract – 1 year, 2 years, etc.
* How will the horse be acquired – will it be purchased at auction or from a private vendor, etc.
* A budget projecting both potential income and expenses.
* Define the boundaries in which the partnership will operate, for example, do you want to race regionally or go national.
* Be specific regarding insurance for your purchase, for example liability, serious injury and mortality insurance.
* Determine whether the contract includes a “get out” clause. What happens if you change your mind?
In addition to a business plan, you need to know how to set up your business properly and how to account for income and expense. Some things you need to do in order to get your business set up properly include:
* Find an accountant with verifiable experience in 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.
* Carefully file away all invoices and receipts, records of winnings etc. that can be identified with your horse racing partnership affairs.
* Keep an appointment book and travel log to document appointments, visits to the racing stable, phone calls, any travel, all associated mileage, etc.
With proper planning, you can get started in the sport of horse racing with defined expectations and organization, which will help you choose a horse racing partnership more quickly. You will also be prepared to keep track of your equine activities in a businesslike manner, which will prepare you for tax time. Being prepared prevents worries or problems, which will allow you to really kick back and enjoy your thoroughbred ownership!