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.
It’s assumed that you will expect the IRS to view your horse racing involvement as a business, so it’s necessary that you manage your share in systematic and professional way. To begin correctly, ahead of committing to a partnership, you should form a precise representation of not only your expectations, but exactly what the partnership is providing for you as well. A well written business plan should summarize your expectations for the syndicate and what you hope to achieve with your venture. Listed are points that you will need to incorporate into your horse racing partnership business plan:
* 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 projected schedule for the partnership, the length of the contract: 1 year, 3 years, etc.
* Manner in which the partnership horse will be purchased: by auction, out of a claiming race, or by private purchase.
* An estimate of anticipated winnings and also costs.
* Mark out framework within which the partnership will function, specifically, do you want a horse that will be competitive at a national level or would you be more comfortable racing locally.
* Be specific regarding insurance for your purchase, for example liability, serious injury and mortality insurance.
* Determine whether the contract includes a “get out” clause. What happens if you change your mind?
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:
* Seek out an accountant who is well acquainted with 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.
* Carefully file away all invoices and receipts, records of winnings etc. that can be identified with your horse racing partnership affairs.
* 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!