It’s a tax deduction most
Americans know little about and few but the wealthy use — the horse
write-off.
Anyone who purchased or leased a horse after Sept. 12,
2001, can now write off $100,000 in horse-related expenses each year. Under the
law, horse owners can deduct food, stabling, transportation, insurance,
veterinary care, and even local and state taxes for the animal.
The tax change expanded an existing exemption
originally intended for far less affluent taxpayers.
The horse deduction was created to aid farmers and
ranchers when horses were a critical part of their operation. But in recent
years, the break has become a shelter for the rich, many of whom own horses for
pleasure.
Congress sweetened this exemption in the months after
the September 11 terrorist attacks by allowing horse owners and businesses to
write off their expenses more quickly.
In 2002, President Bush and Congress allowed horse
owners to write off half the purchase price of a horse within a year. Under the
old law, owners took seven years to write off the purchase.
The
faster depreciation schedule was set to expire earlier this month. But Congress
has already extended the deadline to December and may not allow it to end at
all. That’s because the horse provision and other deductions were tied to
a popular exemption that affects many taxpayers — the child tax credit.
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