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.
• Means of obtaining the horse, where is it coming from, auction, private sale, etc.
• A budget projecting both potential income and expenses.
• Define the boundaries in which the partnership will operate, for example, do you want to race regionally or go national.
• Define your expectations for insuring your investment, (i.e. liability and mortality insurance).
• 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:

• Hire an accountant knowledgeable in the field of horse racing partnerships.
• Establish a separate checking account for your share of the horse racing partnership and label it as such for example, John Smith d/b/a Partnership Name, LLC.
• Keep all bills, receipts, check stubs from winnings, etc. that relate to your horse racing partnership activities.
• Keep an appointment book and travel log to document appointments, visits to the racing stable, phone calls, any travel, all associated mileage, 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!

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Related posts:

1. How To Make Your Horse Racing Partnership Dreams Come True
2. Everyone’s Step By Step Guide To A Horseracing Partnership