Skip to content

Reduction of Capital Gains Holding Period For Horses

Gains from the sale of property that is used in a business, including horses, can qualify for capital gains tax treatment, which means that the tax rate is lower for individuals than the regular personal tax rate. The current capital gains rate is 15%.

Under the current tax code, the holding period for long-term capital gains treatment on all assets used in a trade or business -- except horses and cattle -- is 12 months. Horses held for breeding, racing, showing, draft or other sporting purposes must be held for at least 24 months to qualify for the present 15% long-term capital gains tax rate.

The two-year holding period was enacted in 1969 primarily as an anti-tax shelter provision. Since that time, there have been numerous changes in the tax law, in particular the institution of the passive loss limitations, which have virtually put an end to “tax shelters.” These changes have greatly reduced the possibility of using the horse business as a tax shelter and make the present differences in the required holding period for horses unnecessary and unfair.

This issue was considered during the 108th Congress at the urging of Sen. Jim Bunning (R-KY) who introduced a bill to reduce the capital gains holding period for horses to 12 months. He also had this measure included in a broader bill that passed the Senate.

Sen. Bunning has indicated that he will continue to work to have this change included in other tax bills in this Congress.

More Stories

  • Sunday Night Excitement

    With the Junior Exhibitor Park class being split, 14 events were held on the Sunday evening session, which started at 6:30 p.m. with the ASR Sweepstakes Four-Year-Old Fine Harness class. That class gave the general spectators their thrill for the night as Debbie Foley lost a wheel on her buggy and the horse got loose momentarily. Everything ended okay but she could not get everything back together in the allotted time.  Read More
  • REPORT Leaderboard

    Saddle Horse Report is pleased to present the New REPORT Leaderboard winners which tabulates the leading trainers and sires, both within the American Saddlebred and Hackney Pony classes, at the 2017 World's Championship Horse Show through the end of classes on Sunday, August 20. Read More
  • Sunday Matinee Highlights From WCHS

                The second session of the 2017 World’s Championship Horse Show got underway at noon on Sunday with 15 classes, namely four splits of the Adult Show Pleasure class, older age group equitation classes, open park qualifiers, amateur road pony and horse classes, gaited ponies and an amateur gentlemen’s long-tail class. Read More
  • Honor Society

    Kathy Humphries and Honor Society were reserve in Sunday afternoon’s Amateur Junior Hackney Pleasure Driving Pony class. Longtime friend and trainer Myra Williams worked it out for them to become a team and move to Majestic Oaks to pursue Kathy’s dream of showing her pony at Louisville under the Campbell’s direction. Read More
  • Instant Connection

    A last minute substitution turned out great for Jordyn Isgrigg and Reedann's Fantastic Design. Read More
  • Opening Night At The World's Championship Horse Show

            The 114th World’s Championship Horse Show got underway Saturday night, August 19 with 89 teams competing in the opening session. As tradition dictates it was County Fair night with seven championships held. Rich and Maureen Campbell’s Majestic Oaks won all three pony classes with Maureen driving Regal’s Norma Jean LF, Regal’s Prime Rate LF and Heartland Infinity to the roses. Read More
  • Latest Issue Aug 21 17

    Read More
  • AMHA Regional Shows to Continue

    The AMHA Board of Directors voted at its August 12 third quarter meeting to continue the Regional Show Program with changes to its criteria beginning with the 2018 show season... Read More
  • 2017 Land Of Lincoln Purebred Livestock Breeder’s Award – Paul Briney

    Paul Briney of Chatham, Illinois, has ben a strong advocate for purebred equine in the State of Illinois for over 50 years. He was instrumental in the development of the Horsemen’s Council of Illinois (HCI) established in 1982... Read More
  • Portrait of Dabora Founder

    A portrait of David L. Howard, founder of Saddle Horse Report, was hung today at the Dabora offices in Shelbyville, Tenn., to honor his memory. Howard passed away unexpectedly in December of 2016... Read More