Taxpayers that have a horse-boarding business can deduct the costs of boarding one of their own horses at their stable. This is only allowable if you do not personally use the horse, otherwise, those costs would be nondeductible.
Race horses acquired and held for racing can qualify for capital gain-ordinary loss treatment. This treatment applies to farm buildings, depreciable equipment, and land held more than the long-term holding period. If a taxpayer determines that the fitness and quality of horses does not set the standards for racing and they dispose of the horse within a reasonable time, then the horse is also considered as held for racing purposes.
Any personal living expenses not attributable to taxpayer's business of running a horse breeding farm are not deductible.
For further information, please contact our office.