Dec
10
Steps To Making A Horse Racing Partnership Succeed For You
December 10, 2008 | Leave a Comment
Is it possible that you are thinking about signing up in a horse racing partnership or syndicate, or maybe you’ve already done so? Whichever, it’s extremely important that you learn how to set up your own interest correctly so that you will be in possession of all the necessary accounting and documents when your annual tax time rolls around.
It’s assumed that you will expect the IRS to view your horse racing involvement as a business, so it’s necessary that you manage your share in systematic and professional way. To begin correctly, ahead of committing to a partnership, you should form a precise representation of not only your expectations, but exactly what the partnership is providing for you as well. A well written business plan should summarize your expectations for the syndicate and what you hope to achieve with your venture. Listed are points that you will need to incorporate into your horse racing partnership business plan:
* Exactly how you expect to acquire the finances needed, first for the original purchase into the horse racing partnership, and then to pay the monthly outgoings.
* A projected schedule for the partnership, the length of the contract: 1 year, 3 years, etc.
* Manner in which the partnership horse will be purchased: by auction, out of a claiming race, or by private purchase.
* Projected income and operating expenses.
* Spell out the limits whereby the partnership will work, for instance, do you hope to race nationally or would you prefer to remain local.
* Define your expectations for insuring your investment, (i.e. liability and mortality insurance).
* Determine whether the contract includes a “get out” clause. What happens if you change your mind?
Looking beyond a business plan, it will be necessary for you to construct your business appropriately, recording income and expenditures. Some points you should consider when setting up your books are:
* Seek out an accountant who is well acquainted with 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.
* Set up an appointment diary and travel log and chronicle all appointments, phone calls, race track visits and all partnership associated mileage, etc.
With just a little forethought, it’s fairly easy to involve yourself in the “Sport of Kings” with specific prospects and arrangements, which will guide you toward selecting the horse racing partnership that’s right for you. You will also be set up to record all your tax related activities methodically. Good preparation eliminates issues and headaches, all of which will contribute to your increased enjoyment in your racehorse ownership!
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