Critical Ways To Ensure Your Horse Racing Partnerships’ Success
Maybe you are giving some consideration to joining a horse racing partnership or syndicate, or possibly you are already actively involved? If either is the case, it’s vital you quickly familiarize yourself with how to set up all your records correctly so that you keep a complete track of your share and find yourself fully prepared for tax time or other financial necessities.
If you want the IRS to treat your horse racing activities as a business then you must conduct your dealings in a businesslike manner. To get a proper start, before entering into any partnership you should have a clear picture of both what you expect and what the syndicate is bringing to the table. A business plan can outline what you are looking for in a syndicate and what you expect to see from your investment. Some of the things that should be included in your horse racing partnership 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 time frame for the partnership, how long is the contract, 1 year, 4 years, etc.
* How will the horse be acquired - will it be purchased at auction or from a private vendor, etc.
* A budget projecting both potential income and 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.
* Be specific regarding insurance for your purchase, for example liability, serious injury and mortality insurance.
* Does the contract provide a clause allowing you to get out of the partnership?
As well as a good business plan, you should also learn how to organize your business correctly, accounting for all income and expenses. Important guidelines you need to follow so that your business runs smoothly are:
* Seek out an accountant who is well acquainted with 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.
* Retain every invoice you receive, receipt of winnings, check stub you write that apply to your horse racing partnership enterprise.
* 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!