The President’s “Jobs and Growth Tax Reconciliation Act of 2003” passed in May gives even greater incentives forinvestment in racehorses.

Expensing Amount Increased to $100,000: A purchaser can now write off up to $100,000 of the cost ofhorses, provided total purchases of all depreciable property during the year do not exceed $400,000.The new$100,000 expensing allowance applies to purchases made January 1, 2003 through December 31, 2005.

Bonus Depreciation: In addition to the $100,000 expensing allowance and to regular depreciation, “bonus” first-year depreciation increases to 50% of the cost of horses.The 50% bonus depreciation applies to purchases after May 5, 2003 and before January 1, 2005.There is no limit on the dollar amount of bonus depreciation that can be taken.The original use of the horse still must commence with the purchaser.