Congressman Andy Barr (R-KY) introduced the Equine Tax Parity Act (H.R. 998) March 6, legislation that would reduce the capital gains holding period for horses from 24 months to 12 months.
Unlike most business assets that must be held for more than one year before gains from their sale are eligible for a lower capital gains tax rate, horses must be held for at least two years before the more favorable capital gains rate applies. This legislation would create parity between horses and most other business assets.
"The legislation I have introduced would finally eliminate a 44-year-old tax provision that discourages investment in the equine industry, bringing much needed relief to an economic sector that supports 1.4 million full-time jobs," said Barr. "This bill will bring parity to the tax code for the Commonwealth's signature industry, ultimately helping put Kentuckians back to work."
"This change to the capital gains tax treatment of horses will make investment in Thoroughbred racing and breeding stock more attractive," said Alex Waldrop, president and CEO of the National Thoroughbred Racing Association. "Our industry thanks Congressman Barr for his commitment to this important tax fairness issue, and we look forward to working with him to build support for H.R.998."