Skip to content

Benefits for Horse Industry in Small Business Stimulus Bill



The American Horse Council reports that President Obama signed the Small Business Jobs and Credit Act of 2010 into law on Sept. 27, 2010. The bill is intended to help small businesses and create new jobs. The bill continues the bigger write-off for horses and other property purchased and placed in service by a horse business that was originally included in earlier stimulus bills.

The first incentive allows an owner who purchases a horse or other business property used in a horse business and places it in service in 2010 or 2011 to expense up to $500,000 of the cost. This so-called "Section 179" expensing allowance applies to horses, farm equipment and most other depreciable property. Once total purchases of horses and other eligible property reach $2 million, the expense allowance goes down one dollar for each dollar spent over $2 million. Without the bill the expensing allowance would have been $250,000 in 2010 and gone down to $25,000 for later years.

"Let’s assume a horse business purchases $750,000 of depreciable property in 2010, including $650,000 for horses, and places it all in service. That business can write off $500,000 on its 2010 tax return and depreciate the balance," explained American Horse Council President Jay Hickey. This provision will benefit any business involved in the horse industry that purchases and places depreciable property in service in 2010 or 2011.

The second incentive reinstitutes the 50% first-year bonus depreciation for horses and most other depreciable property purchased and placed in service during 2010. Bonus depreciation had expired at the end of 2009. This benefit applies to any property that has a depreciable life of 20 years or less. Also, the property must be new, meaning that the original use of the horse or other property must commence with the taxpayer. For a horse to be eligible, it cannot have been used for any purpose before it is purchased.

"The tax benefits in this bill are great for any horse business that has or is planning on making major purchases," said Hickey. "The expensing and bonus depreciation provisions can be used together in 2010. For example, let’s assume an owner pays $1,000,000 for a colt to be used for racing and $100,000 for other depreciable property, bringing total purchases to $1,100,000 in 2010. If the colt had never been raced or used for any other purpose before the purchase and is placed into service, the owner would be able to expense $500,000, deduct another $300,000 of bonus depreciation (50% of the $600,000 remaining balance), and take regular depreciation on the $300,000 balance."

"We hope the horse industry will take full advantage of these two tax benefits while they last," said Hickey.

More Stories

  • Latest Issue 12 10 18

    Read More
  • Obituary - Gregory Ramos Maldonado

    Gregory Ramos Maldonado passed away Sunday, December 2 at his home in Springfield, Kentucky. He was 63. Read More
  • Obituary – Steve Hanks

    A noted horseman and dear friend to many, Steve Hanks passed away at his residence on Monday, December 3 at the age of 66. Born July 24, 1952 in Statesville, North Carolina, he was the son of Harold Hanks and the late Frances Foster Hanks. Read More
  • Schedule Set for 34th Annual Wisconsin Limited Breeders Stallion Auction

    The 34th Annual Wisconsin Limited Breeders Stallion Service Auction will be held Sunday, January 13, 2019 at the Thunder Bay Restaurant in Milwaukee, WI. Read More
  • 2018 American Saddlebred People's Choice

    You don’t have to be a member of anything to vote for your favorite horses, exhibitors, trainers and shows in Saddle Horse Report People’s Choice conducted by The Saddle Horse Report and Horse World. It's wide open...just your opinion of who were the 'Best of the Best' during the great 2018 season. Read More
  • 2018 Morgan Horse People's Choice

    You don’t have to be a member of anything to vote for your favorite horses, exhibitors, trainers and shows in Saddle Horse Report People’s Choice conducted by The Saddle Horse Report and Horse World. It's wide open...just your opinion of who were the 'Best of the Best' during the great 2018 season. Read More
  • Save the Date for LBS Grand Weekend

    The AHHS Limited Breeders Sweepstakes Grand Weekend will be held in Fishers, Indiana starting Friday evening, March 8, 2019. On Saturday, March 9, there will be two sessions of speakers and the annual general membership meeting, followed by the Limited Breeders Sweepstakes dinner and stallion auction. Read More
  • American Saddlebred Museum Art Auction

    The American Saddlebred Museum is pleased to announce the highly anticipated Equine Art, Antique and Rare Book Auction will take place on Saturday, June 8, 2019 at the American Saddlebred Museum at the Kentucky Horse Park.   Read More
  • Attend the 2019 UPHA Conference in Beautiful Palm Springs, CA

    Please plan to attend The 2019 UPHA Conference where the United Professional Horsemen's Association, will unite with the American Hackney Horse Society, American Road Horse and Pony Association, American Saddlebred Horse Association, American Saddlebred Museum, and the American Saddlebred Registry, Inc,... Read More
  • George Knight Passes

    A 2003 inductee into the World’s Championship Horse Show Hall of Fame, George Knight passed away this morning (Wednesday, November 21, 2018). Knight will be remembered for many great open, amateur and ladies performance horses, including 1989 and ’90 World’s Grand Champion Five-Gaited Man On The Town. Read More