Is it possible that you are thinking about signing up in a horse racing partnership or syndicate, or maybe you’ve already done so? Whichever, it’s extremely important that you learn how to set up your own interest correctly so that you will be in possession of all the necessary accounting and documents when your annual tax time rolls around.

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:

* Exactly how you expect to acquire the finances needed, first for the original purchase into the horse racing partnership, and then to pay the monthly outgoings.

* A time frame for the partnership, how long is the contract, 1 year, 4 years, etc.

* Manner in which the partnership horse will be purchased: by auction, out of a claiming race, or by private purchase.

* Projected income and operating 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).

* Determine whether the contract includes a “get out” clause. What happens if you change your mind?

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:

* Hire an accountant knowledgeable in the field of 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.

* 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.

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!