Steps To Making A Horse Racing Partnership Succeed For You
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:
* Your strategy for providing the required funds, both for the original horse racing partnership investment, and then to meet the monthly bills.
* A time frame for the partnership, how long is the contract, 1 year, 4 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.
* Clearly indicate what level of insurance you intend to purchase to cover your risk.
* Is there a clause in the contract so you can get out of the partnership should you choose to do so?
In addition to a business plan, you need to know how to set up your business properly and how to account for income and expense. Some things you need to do in order to get your business set up properly include:
* Find an accountant with verifiable experience in 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.
* Retain every invoice you receive, receipt of winnings, check stub you write that apply to your horse racing partnership enterprise.
* Establish an engagement book and travel log and carefully record all mileage to and from the track, phone calls, appointments, etc.
With proper planning, you can get started in the sport of horse racing with defined expectations and organization, which will help you choose a horse racing partnership more quickly. You will also be prepared to keep track of your equine activities in a businesslike manner, which will prepare you for tax time. Being prepared prevents worries or problems, which will allow you to really kick back and enjoy your thoroughbred ownership!