Proven Strategies: Looking a Gift Horse in the Mouth

A donation of a horse to a tax-exempt organization can be mutually beneficial. The donor could potentially obtain an income tax deduction, and the organization receives a worthwhile asset. The horse itself also appreciates greener pastures.

This article summarizes the guidelines for horse owners contemplating such a charitable contribution.
Recipient
Be sure that the donee organization qualifies as an eligible charity under the Internal Revenue Code and that your horse will be used by the organization to further its exempt purpose. You can ask to see the “IRS Determination Letter” or look online for the listing of approved charities.

 

Determining Fair Market Value (FMV)
What is the price your horse could be donated for on the date of your charitable gift? You may want to consider the services of a professional equine appraiser.

FMV will be a function of several variables, including the horse's age, the number of years owned, how the horse has been trained and used, as well as the horse's personality and track record.

The appraisal should include a description of the horse, the dates of the appraisal and donation, the appraiser's name and qualifications, and the appraisal method used.

 

Potential Income Tax Deduction
Generally, you may deduct the FMV of the horse you are donating, though many caveats apply. The full FMV deduction is available when:

–The horse will be used by the donee charitable organization directly in regard to its stated charitable purpose.

–There is no financial consideration received in return.

–You have used the horse in business activities for the prior 24 months.

 

Limitations on the Income Tax Charitable Contribution Deduction
If the horse is not used in connection with the charity's purpose, the income tax deduction becomes the lesser of the FMV of the horse or the amount of your cost basis. A horse that you bred yourself or one that is fully depreciated would not give rise to any deduction in such a case.

This same limitation of the lesser of FMV or cost basis also applies to a horse that has been owned for less than 24 months.

Another situation of a reduced deduction arises when a donated horse that has appreciated in value but has been depreciated. In this scenario, the amount of the charitable deduction is reduced by the amount of depreciation that has been taken.

Further, if you donate a horse that has diminished in value, i.e. your cost basis is higher than the FMV, your charitable deduction would be limited to the FMV.

In such a case, you may be better off selling the horse to generate a tax loss, then donating the proceeds to the charity.

 

How to Report Your Donation on Your Tax Return
When your charitable deduction is more than $500, you will need to include Form 8283 with your tax return. This form asks for how and when you acquired the horse, your basis, the estimated FMV, and the method used to come up with the FMV.

If the charitable deduction to be taken is greater than $5,000, you will need to have your horse appraised at the time of the donation. This attached written appraisal needs to be contemporaneous and signed by the appraiser, along with the appraiser's qualifications and method(s) used to determine the valuation.

 

The Green Group
Our team here at the Green Group, with our many decades of equine experience, would be glad to walk you through the steps to make sure that you achieve the maximum charitable contribution deduction that you deserve.

The post Proven Strategies: Looking a Gift Horse in the Mouth appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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ERC Returns for Fourth Season

Officially kicking off its fourth season, the Empire Racing Club (ERC) will offer a reduced membership price of $400 through the official re-launch date of May 1. Membership dues for both new and returning members will be $475 beginning May 2, 2022. Membership is open to both licensed and unlicensed enthusiasts looking to enjoy the social and educational benefits of the Club.

The ERC will once again be managed by famed race-caller Tom Durkin. Training the current roster of runners for the 2022 season are Hall of Famer Mark Casse; two-time Hall of Fame nominee Christophe Clement; and four-time leading trainer in New York, Linda Rice. ERC team runners currently include stakes winner Proven Strategies (Sky Mesa), in addition to Community Adjusted (Summer Front) and Freedomofthepress (Mshawish), who is entered to run at Aqueduct Saturday, Apr. 16.

“AND WE'RE OFF!!!!!!! Once again, the Empire Racing Club is off and running for another new year of New York Thoroughbred racing,” said ERC Managing Partner Tom Durkin. “The Empire Racing Club makes possible to members the thrill of owning a racehorse and being part of the game with a behind the scenes experience. The Club will have a number of runners to follow this year. It's what we call 'action'. See you in the winner's circle!”

Similarly to last season, ERC members receive regular updates about their horses via conference call, email and social media. The Club will offer the opportunity to visit the backstretch for morning training and the paddock when the ERC horses run, and will host dedicated ERC events.

“The new season will continue to feature the ERC Educational ZOOM Series in addition to the popular Race Day Events at NYRA tracks,” said ERC Coordinator Christina Bossinakis. “New for this year, the ERC will craft initiatives to offer interested members the opportunity to dip their toe into various levels of ownership, including the claiming game. Whether the goal is to enjoy the social scene, take advantage of the educational aspects or to gain a stake in the game, there will be something for everyone.”

Spearheaded by the New York Thoroughbred Horsemen's Association (NYTHA) in 2019, the ERC is a non-profit organization designed to introduce new fans to racehorse ownership.

For more information, visit www.empireracingclubny.com

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Jersey Derby Winner Vanzzy Returns To Monmouth For Red Bank Stakes

After seeing Vanzzy run one of the better races of his career in winning last year's Jersey Derby at Monmouth Park, trainer Michael Pino is hoping to recapture some of that magic when he sends the colt out in Saturday's $150,000 Red Bank Stakes.

Now a 4-year-old, Vanzzy heads into the one-mile grass race that serves as the feature on Monmouth Park's 12-race card off two solid efforts to start his 2021 campaign.

“He was a little unlucky in his first start of the year (a third-place finish at Pimlico on July 11),” said Pino. “He threw a shoe in the paddock and got a little too keyed up. After he broke he wanted to run off with the rider and never settled at all.

“But he ran well all things considered and then came back and won his second time out (at Delaware Park on July 31) despite some trouble.”

Pino said the son of Verrazano “is a stronger horse this year.”

He will have to be Saturday, despite the short field. Among the six entered for the turf are the Mark Casse-trained Proven Strategies, who comes off a strong third-place finish in the Grade 2 Connaught Cup at Woodbine on July 18, and the Chad Brown-trained Value Proposition, listed as the 4-5 morning line favorite. Value Proposition ships in from New York for the race, with Paco Lopez listed to ride.

“Mark Casse's horse has speed but Vanzzy should be forwardly placed,” said Pino. “Obviously, Chad Brown's horse off the numbers looks like the horse to beat in the race. But you've got to run against that kind every now and then.

“Vanzzy is definitely a more mature horse this year and a stronger horse. I know we're going to see some strong races out of him. I'm planning and hoping that happens.”

Vanzzy, owned by Smart Angle LLP, has generally held his own through his 14-race career, with five wins, a second and a third and career earnings of $280,364. He shows two wins and two thirds in seven turf tries, the most notable being at a mile and a sixteenth in the 2020 Jersey Derby last year.

Pino has also entered Bird King in the race, with the 4-year-old gelding looking to make his turf debut after 16 dirt races.

The post Jersey Derby Winner Vanzzy Returns To Monmouth For Red Bank Stakes appeared first on Horse Racing News | Paulick Report.

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Empire Racing Club Launches Third Season

Kicking off its third season, the Empire Racing Club (ERC) will offer a reduced price of $400 through the official re-launch date of May 15. In a departure from the first two seasons, 2021 membership is open to both licensed and unlicensed racing enthusiasts looking to enjoy the social and educational benefits of the Club. The 2021 ERC season will be limited to 200 members. The ERC will once again be managed by famed race-caller Tom Durkin. Training the current team of runners for the 2021 season are Hall of Famer Mark Casse; Hall of Fame nominee Christophe Clement, the leading trainer at Aqueduct's 2020 Fall meet; and Grade 1-winning trainer Tom Morley, based year-round in the Empire State and husband of NYRA TV personality Maggie Wolfendale.

Team runners currently include stakes winner stakes winner Proven Strategies (Sky Mesa), maiden turf filly Community Adjusted (Summer Front), and the team newcomer, unraced 2-year-old filly Boom Roasted (Practical Joke). Winner of Woodbine's Toronto Cup last season, Proven Strategies, campaigned by the Empire Racing Club and Leonard and Jonathan Green, is a 10-1 shot on the morning line for the $100,000 Elusive Quality S. at Belmont Park Saturday. Also running during Belmont's opening week, Community Adjusted finished fourth for Hall of Fame nominee Christophe Clement, who trains for the Empire Racing Club and Rob Masiello. Boom Roasted, also competing for the ERC and Masiello, is expected to join Tom Morley in New York in the coming week.

“I am really looking forward to seeing the members in person again–at the workouts, the races, and at our social gatherings where we can renew old acquaintances and share the experiences of up close involvement in racing,” said Durkin.

Spearheaded by the New York Thoroughbred Horsemen's Association (NYTHA) in 2019, the ERC is a non-profit organization designed to introduce new fans to racehorse ownership.

One benefit of ERC membership is the ERC Educational Series, regular Zoom meetings for members which have featured leading professionals from all aspects of the industry, including Todd Pletcher, Christophe Clement, Spendthrift's GM Ned Toffey, jockey Tyler Gaffalione, Linda Rice, Starlight and StarLadies' Jack and Laurie Wolf, TVG's Caton Bredar, DRF's Mike Welsch and David Grening, etc. Topics covered during the first two seasons of the ERC included breeding, sales, racing partnerships and syndicates, the claiming game, equine health and veterinary care, Thoroughbred retirement, and handicapping.

“I'm really excited to kick off the new year with our members,” said ERC Board member Rob Masiello. “We were able to adapt to the challenges that last year presented and create a series of virtual meetings with our members that included several leading owners, trainers, and bloodstock agents.”

ERC members receive regular updates about their horses via conference call, email and social media. Once fans are welcomed back to the track, the Club will offer the opportunity to visit the backstretch for morning training and the paddock when the ERC horses run, and will host dedicated ERC events.

For more information, visit www.empireracingclub.wildapricot.org.

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