Steps To Making A Horse Racing Partnership Succeed For You
Posted on December 15, 2008
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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.
If you expect the IRS to view your horse racing venture as a business, you will need to be systematic and professional in your approach. To set off on the right foot, in advance of investing in a partnership, you need to establish positively just what you want to achieve as well as what the syndicate is offering. A business plan should list precisely what you are hoping for in a partnership and what you anticipate happening with your investment. A few important items you should list in your horse racing business plan are:
* Where you plan to obtain the funds necessary to make both the initial investment in a horse racing partnership and to cover the monthly expenditures.
* A best estimate that the partnership’s length, the duration of the contract – 1 year, 2 years, etc.
* Means of obtaining the horse, where is it coming from, auction, private sale, 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.
* Define your expectations for insuring your investment, (i.e. liability and mortality insurance).
* Does the contract provide a clause allowing you to get out of the partnership?
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:
* Hire an accountant knowledgeable in the field of horse racing partnerships.
* Set up a checking account and tag it with reference to the partnership, for example, Jeff Sanchez DBA Sanchez Stable, LLC. Use it only for partnership transactions.
* 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.
Using a good plan of action, anyone can become involved in horse racing with clearly defined desires and methods. You will then be in the perfect position to pick the right horse racing partnership. You will also be equipped to carefully track and record all your equine tasks effectively, thus preparing you for tax time. Preparedness will ensure that things run smoothly and that will leave you free to really take pleasure in your brand new racehorse!
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