This page provides the owners with a general outline of the costs associated with thoroughbred horse ownership. We have provided this outline to assist those who wish to take part in these various thoroughbred racing and breeding ventures provided by Star Track Stable. Star Track is always attentive to the costs associated with thoroughbred horse ownership and, while we never compromise on the quality of care for the horses, we do focus on obtaining cost competitive fees for industry services rendered. Star Track administration fees as well are kept at practical levels. In short, Star Track watches all costs for the co-owners as if it was our own money because part of the investment is our own money. The profit motives are always at the forefront in our efforts to make the business efficient and profitable.
Regarding the aspect of tax write-off, each Co-Owner is reminded to consult with their accountant.
Expenses and Deductions Information
RACEHORSES AT PRIMARY RACETRACKS.
At tracks such as Belmont, Aqueduct and Saratoga training fees will run around $90.00 per day, plus $200.00 per month blacksmith and an estimated $300.00 per month for the veterinarian. Add tack and vitamins and some other assorted fees such as transportation and we can estimate the cost at these primary tracks to be about $40.000.00 per annum.
RACEHORSES AT FINGER LAKES AND SECONDARY RACETRACKS.
At Finger Lakes where Star Track Stable often starts the racing life of its runners we can expect these cost to run closer to $30,000.00
MARES AND MARES WITH FOALS ON THE FARM.
Mares at the farm cost about $26.00 per day and another few dollars when their foals are at their side. To this their are the other costs to include veterinarian and blacksmith and supplies and supplements and we can expect these costs to run slightly less than $12,000 per year.
YOUNG HORSES GROWING UP.
For horses that have been weaned and their year as a yearling, we can expect the costs to run very similar to the costs of caring for mares which is about $26.00 per day and another few dollars when their foals are at their side. To this their are the other costs to include veterinarian, blacksmith and so on and the number of about $12,000 per annum is a likely guide for horses in this category.
RACEHORSES IN TRAINING PRIOR TO RUNNING, THE TWO YEAR OLD YEAR.
As a general rule, we can expect the horses preparing for the races to have about the same expenses as those horses at secondary tracks or about $30,000 if all goes smooth to get them to the racetrack about one month to six weeks from a race.
GENERAL COSTS OF ADMINISTRATION, LEGAL AND ACCOUNTING.
Star Track Stable and its staff will provide the administration in all aspects on a reasonable basis.
As a general rule, expenses are 100% tax deductible and the horses are depreciated over various periods of time. Stud Fees are usually 100% deductible in the year paid since Star Track Stable is essentially a racing and breeding to race organizations.
PURSE EARNINGS AND BREEDERS’ AWARDS.
These earnings are ordinary income and is taxed as such.
SALES AND CLAIMS.
Income derived from sales and claims are usually Long Term Capital gains once the deductions from the purchase price has been recaptured. When the horse is a homebred, a 100% Long Term Capital Gains is the norm.
The Risk Factors of Racing Partnerships
Like any business, there are a number of risks involved in participating in a Thoroughbred racing partnership. The investor should consider various aspects related to the risk factors of owning and racing Thoroughbred Horses.
The Thoroughbred Industry
The business of breeding, training and racing Thoroughbreds is a high-risk venture. The success of the race horse partnership depends upon the present and future values of Thoroughbreds as a whole ? and in particular, of each partnership’s Thoroughbreds. Although a Thoroughbred’s future value cannot be predicted, the Thoroughbred market is affected by the current economy, as well the interest levels of Thoroughbred race horse investors. Additionally, the expenses of maintaining, caring for, training and racing Thoroughbreds can be expected to increase annually, regardless of what happens to the future market prices of Thoroughbreds.
The value of a racehorse can fluctuate dramatically throughout the year based on the racehorse’s success and physical condition. An injury or a series of poor efforts can reduce the value of any horse sharply. Conversely, good or excellent racing performance can enhance the value of a race horse dramatically.
The Thoroughbred racing industry is an intensely competitive and highly speculative one. A significant number of the people who bid for and purchase racehorses have substantially greater financial resources than those of the average Thoroughbred owner. Additionally, many business ventures in the Thoroughbred industry do not generate net profits. And because the Thoroughbred horse bloodstock markets are international, smaller owners can be competing against many of the major breeders and dealers in the world for high-quality Thoroughbreds. On the track, the same circumstances exist. At every level, competition for purse money is fierce, and many highly motivated owners operate on an international scale, with far greater resources to bring to bear than Star Track.
As a Thoroughbred owner, there is no guarantee that you will receive an insured racehorse’s full purchase price if there is an accident. This is because most insurance policies pay the lower of the policy amount or the current value when the insured casualty occurs.
Because Thoroughbred horse racing is a sport as well as a business, there are certain industry practices and structures that are not focused on maximizing an owner’s profit in the horse. For example, a particular Thoroughbred racehorse bloodline could command substantial prices as a result of the interests of a small group of people. If these individuals eventually lose interest in the bloodline, the value of the race horse’s bloodline could be affected.
Uncertainty of the Thoroughbred Market ? Owners can use sales of Thoroughbred racehorses at public auction as a measurement of the relative increases or decreases in the value of racehorses, however there is also a dominant private market that does not provide sales statistics.
The value of Thoroughbreds racing will vary at racing venues due to several factors, including purse structure fluctuations due to ownership changes; policy modifications; changes in handle from variations in field size and betting interest; and competition or cooperation with other gambling modes.
If the Thoroughbred racing industry suffers a decline, or if general economic conditions deteriorate, the average sales price in the Thoroughbred horse market may also decline. As a result, a Thoroughbred owner could suffer substantial losses.
Additionally, many of the factors that affect the prices paid for Thoroughbred horses are beyond the owner’s control. These factors include purchasers who buy race horses for speculative purposes; foreign investors; the federal income tax treatment of racing and related activities; the rules of The Jockey Club prohibiting artificial insemination; the continuation or expansion of legalized gambling; and the size of Thoroughbred horse racing purses.