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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 expect the IRS to view your horse racing venture as a business, you will need to be systematic and professional in your approach. To set off on the right foot, in advance of investing in a partnership, you need to establish positively just what you want to achieve as well as what the syndicate is offering. A business plan should list precisely what you are hoping for in a partnership and what you anticipate happening with your investment. A few important items you should list in your horse racing 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.

* How will the horse be acquired - will it be purchased at auction or from a private vendor, etc.

* Projected income and operating expenses.

* Mark out framework within which the partnership will function, specifically, do you want a horse that will be competitive at a national level or would you be more comfortable racing locally.

* Be specific regarding insurance for your purchase, for example liability, serious injury and mortality insurance.

* Does the contract provide a clause allowing you to get out of the partnership?

Looking beyond a business plan, it will be necessary for you to construct your business appropriately, recording income and expenditures. Some points you should consider when setting up your books are:

* Find an accountant with verifiable experience in horse racing partnerships.

* Set up a checking account and tag it with reference to the partnership, for example, Jeff Sanchez DBA Sanchez Stable, LLC. Use it only for partnership transactions.

* Retain every invoice you receive, receipt of winnings, check stub you write that apply to your horse racing partnership enterprise.

* Establish an engagement book and travel log and carefully record all mileage to and from the track, phone calls, appointments, 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!

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