The Green Group | Horse Racing Free Tips

OwnerView Thoroughbred Owner Conference Virtual Series Begins with Panel on Audits

The 2024 Thoroughbred Owner Conference hosted its first panel Mar. 5, with a discussion about how Thoroughbred owners can avoid, prepare for and survive an audit. The panel was sponsored by Mersant International.

Gary Falter, project manager for OwnerView, moderated the panel with guests Len Green, founder and chairman of The Green Group, and Frank Palino, Tax Controversy & Divorce Mediation, The Green Group.

The panel delved into the intricacies of how the Internal Revenue Service views horse and farm owners and how those owners can best prepare for tax season.

Other topics covered the importance of a business plan and an LLC, red flags for being audited, showing profit, and hobby and passive losses.

For the replay of Tuesday's Thoroughbred Owner Conference panel, click here.

Nine additional Thoroughbred Owner Conference virtual panels are scheduled for 2024. The next session, “Information Resources for Owners,” will be held Apr. 9 at 2 p.m. ET.

For the full schedule, click here.

There is no registration fee for the 2024 virtual conference series, but registration is required. For more information about the owner conference series, including the schedule of panels and registration, visit www.ownerview.com/event/conference or contact Gary Falter at 859.224.2803 or gfalter@jockeyclub.com.

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Todd Fincher Joins TDN Writer’s Room Podcast

Todd Fincher, a standout on the New Mexico circuit, picked the perfect time and place to pick up his first Grade I win. His stable star Senor Buscador (Mineshaft), who was overdue to collect a big win, got the job done in the GI Saudi Cup. With a purse of $20 million, it is the richest Thoroughbred race in the world. Fincher joined this week's TDN Writers' Room podcast presented by Keeneland to discuss his popular horse, the reasons why he likes training in New Mexico, what are the prospects of a stallion career for Senor Buscador and more. Fincher was this week's Green Group Guest of the Week.

The margin was a nose. Did he know he had won and what made the difference this time?

“Just a little less bad luck is all that we really needed for this to happen,” Fincher said. “Because every time he puts himself in a terrible position. The Japanese jockey (Yuga Kawada, the rider Ushba Tesoro) really did a good job. He had me in a bad position for a long time. We didn't have anywhere to go. He had us in a bad spot, and we had to wait down the stretch. When that horse finally cleared us that was when we could move out and make our run. Junior (Alvarado) timed that perfectly. That's why we were so emotional. Because we never thought he was going to win until the last second, and we still didn't know if we won because the finish was so close.”

Senor Buscador will now head to Dubai for the GI Dubai World Cup. Run at a mile-and-a-quarter and around two turns, that race seems like a better fit for Senor Buscador than the one-turn, mile-and-an-eighth Saudi Cup. But Fincher said the real key to victory in Dubai will be whether or not the early pace is fast enough to set up his late run.

“He needs some kind of setup,” Fincher said. “I don't know why he does it, but he takes himself back right out of the gate. If you watch the Pegasus, he out broke National Treasure and then, three jumps later, he's four lengths behind him. So, he does that to himself and he's not going to change that style. And we can't change it. So, you're still going to need a pace because he's not going to get up there mid-pack and hang around. So, he needs an honest pace.”

Fincher has been training since the late nineties and has been the proverbial big fish in the small pond that is New Mexico racing. Does he ever see himself moving on to a tougher circuit?

“You have to have the horses to make a move like that and I just don't have them,” he said. “I have a ton of New Mexico breds. We break usually 30 to 50 horses a year, and 95% of them are New Mexico breds. Last year, we broke two Kentucky breds and one Louisiana bred, and the rest were New Mexico breds. So, it's not like I normally have the right horses to do it. But this year, we actually broke 15 Kentucky breds and a couple of Louisiana breds. So, we might have an opportunity to take a stable somewhere. But you can't go somewhere with two or three horses and set up a stable and think people are going to bring you horses”.

During the stallion spotlight segments of the podcast, the crew sang the praises of the WinStar stallion Improbable, who stands for $15,000, and the Coolmore stallion Tiz the Law, who stands for $20,000. His first crop are now 2-year-olds and will be hitting the track shortly.

Elsewhere on the podcast, which is also sponsored by WinStar Farm, the Kentucky Thoroughbred Association, Coolmore, the Pennsylvania Horse Breeders Association,https://www.kentuckybred.org/https://www.nyrabets.com/ 1/ST Racing, West Point Thoroughbreds, https://www.winstarfarm.com/and XBTV.com, the team of Randy Moss, Bill Finley and Zoe Cadman reviewed the Saudi Cup, the GII Rebel S. and the GIII Honeybee Stakes at Oaklawn. They also looked ahead to this weekend's races, which will include major preps for the GI Kentucky Derby in the GII San Felipe S. at Santa Anita and the GII Fountain of Youth at Gulfstream. There was also a discussion of the Jeffrey Englehart story and whether or not HISA should expand its role so that it can oversee the sales.

To watch the Writers' Room, click here. To view the show as a podcast, click here.

The post Todd Fincher Joins TDN Writer’s Room Podcast appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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Len Green Joins the TDN Writers’ Room Podcast

Who better to be the Green Group Guest of the Week Than Mr. Green Group himself, Len Green. Green joined the 'TDN Writers' Room' podcast presented by Keeneland to discuss the latest goings-on with his DJ Stable as well as to offer advice on how those in the Thoroughbred industry can best prepare for the upcoming tax season.

The best horse DJ Stable campaigned in recent years was Wonder Wheel (Into Mischief), who won the 2022 GI Breeders' Cup Juvenile Fillies on her way to being named champion 2-year-old filly. She did not live up to expectations this year, going 0-for-3. But Green said that, as much as racing is a hobby to many, it should also always be considered a business. The Greens bought Wonder Wheel as a yearling at Keeneland September for $275,000 and sold her at this year's Fasig-Tipton November Sale for $3.2 million. It was, Green said, the proper business decision to make.

“If you decide that you want to run this as a business, and I think it's very, very important that people see this as a business, you have to make business decisions,” he said. “And the business decisions are that when a horse is no longer a racing horse, it's time to cut bait. I might have said it's not worth taking a horse out of training after a tough campaign. Instead, wait several months and try to get her back into racing form. Maybe with other horses, it works. Now was the time to sow it as opposed to racing on. So that's the difference between people who are in this thing for a hobby and not as a business. Businesses, you make business decisions.”

Green believes he knows the tax business when it comes to racing inside and out because he has owned so many horses himself and has been active in the sport for decades.

“I know these things having owned 200 horses every year myself,” he said. “I know what the expense is. I know what the ratios are. I know what you're missing. Have you donated any horses? Where is this horse? Where did you buy it? Well, I bought it, but I didn't pay for it yet. It doesn't make any difference when you pay for it. It's when you take a title and when you put it in use, that's when it's deductible. Whether you use me or somebody else, you have to have someone who is knowledgeable. Someone who can look at your expenses and tell you, okay, here's the way to do it.”

Elsewhere on the podcast, which is also sponsored by the Pennsylvania Horse Breeders Association,https://www.kentuckybred.org/https://www.nyrabets.com/ West Point Thoroughbreds, Lane's End, WinStar Farm and XBTV.com, the team of Zoe Cadman and Bill Finley reviewed last weekend's races at Aqueduct where the fare included the GII Cigar Mile H. and a thrilling rendition of the GII Remsen S., won by Dornoch (Good Magic), the full-brother to 2023 GI Kentucky Derby winner Mage. The focus turned to Del Mar, where Chad Brown added to his incredible record at the seaside oval, winning two Grade I's, including the GI Matriarch S., where his quartet of starters finished one, two, three and four. Cadman and Finley also gave their take on the latest developments in the scopolamine case from the 2018 GI Santa Anita Derby, that has, at least for now, resulted in the disqualification of Justify (Scat Daddy).

Click here for the podcast video, or here for the audio version.

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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.

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