Critical Ways To Ensure Your Horse Racing Partnerships’ Success
Are you considering becoming involved in a horse racing partnership or syndicate, or are you already an active partner? If so, it is crucial to know how to get started properly in order to keep track of your partnership share and be prepared when you have to give an account of your records for yearly tax preparation or other purposes.
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:
* Your strategy for providing the required funds, both for the original horse racing partnership investment, and then to meet the monthly bills.
* A projected schedule for the partnership, the length of the contract: 1 year, 3 years, etc.
* How will the horse be acquired - will it be purchased at auction or from a private vendor, etc.
* An estimate of anticipated winnings and also costs.
* Define the boundaries in which the partnership will operate, for example, do you want to race regionally or go national.
* 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?
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:
* 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.
* 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!