The American Horse Council is happy to report that President Obama signed the Small Business Jobs and Credit Act of 2010 into law today.  The bill is intended to help small businesses and create new jobs.  The bill continues the bigger write-off for  horses and other property purchased and placed in service by a horse business that were originally included in earlier stimulus bills.

Expensing Allowance

The first incentive allows an owner who purchases a horse or other business property used in a horse business and places it in service in 2010 or 2011 to expense up to $500,000 of the cost.  This so-called “Section 179” expensing allowance applies to horses, farm equipment and most other depreciable property.  Once total purchases of horses and other eligible property reach $2 million, the expense allowance goes down one dollar for each dollar spent over $2 million.  Without the bill the expensing allowance would have been $250,000 in 2010 and gone down to $25,000 for later years.

To illustrate the expensing allowance, assume a horse business purchases $750,000 of depreciable property in 2010, including $650,000 for horses.  That business can write off $500,000 on its 2010 tax return and depreciate the balance.

This provision will benefit any business involved in the horse industry that purchases and places depreciable property in service in 2010 or 2011.

Bonus Depreciation

The second incentive reinstitutes the 50% first-year bonus depreciation for horses and most other depreciable property purchased and placed in service during 2010.  It applies to any property that has a depreciable life of 20 years or less.  Also, the property must be new, meaning that the original use of the horse or other property must commence with the taxpayer.  For a horse to be eligible, it cannot have been used for any purpose before it is purchased.  Prior to this bill bonus depreciation had expired at the end of 2009.

To illustrate expensing and bonus depreciation, assume that in 2010 an owner pays $1,000,000 for a colt to be used for racing and $100,000 for other depreciable property, bringing total purchases to $1,100,000.  The young colt had never been raced or used for any other purpose before the purchase.  The horse business would be able to expense $500,000 (as explained above), deduct another $300,000 of bonus depreciation (50% of the $600,000 remaining balance), and take regular depreciation on the $300,000 balance.

Please call the AHC if you have any questions.

Paso Robles, California, trainer Phillip Ralls topped the herd work preliminaries of the National Reined Cow Horse Association Snaffle Bit Futurity, held September 20-October 3 at the Reno Livestock Events Center in Reno, Nevada. Ralls’ score of 220.5 on Dom Dualuise, owned by Chris Larson, edged out the next closest entry by a mere half-point.

Ralls and the Dual Rey stallion, out of Smart Little XX, competed on the first day of Open herd work preliminary competition. That high score was worth $1,500 in go-round money.

At the Annual Hall of Fame Banquet on October 1, Ralls will be awarded a Gist Silversmiths Gold Buckle, sponsored by Bill and Michelle Cowan, the Oxbow Perpetual Trophy, and a bronze from the National Cutting Horse Association for the preliminary herd work win.

Clayton Edsall and Skeets Oak Peppy, by Skeets Peppy out of Oak Ill Be, took first place in the Cinch Intermediate Open and second place in the Open of the herd work preliminary go-round with a 220. Edsall, who owns the talented gelding, collected $2,250 for the two divisions. Skeets Oak Peppy is a full sibling to McKenzie Merrill’s 2009 NRCHA Snaffle Bit Futurity Non Pro Reserve Champion and Intermediate Non Pro Champion Ill Be Skeets.

Winston Hansma and his horse, Jills A Little Blue, marked a 217 to claim second place in the Cinch Intermediate Open and first in the Limited Open. Hansma, of Weatherford, Texas, collected $1,600. Jills A Little Blue is by Mecom Blue out of Jills CD.

The Open Snaffle Bit Futurity preliminaries continue on Thursday with the rein work. The Open, Cinch Intermediate Open, and Limited Open finalists will be decided after the cow work preliminaries on Tuesday, September 28. The Open finals will be held on Sunday, October 3.

Complete results can be found on www.nrcha.com.

The National Reined Cow Horse Association, the governing body of cow horse competition, is responsible for promoting the sport, insuring high standards of competition and educating members and the public about the history and tradition of the cow horse. Through the support of a Corporate Partner family that includes Adequan, Bob’s Custom Saddles, Cinch, Classic Equine, Gist Silversmiths, John Deere, Markel Insurance, MD Barns, Merial products ULCERGARD and EQUIOXX, Nutrena, Pfizer Animal Health, Platinum Performance, Quarter Horse News, Rios of Mercedes, Running W Designs, the Silver Legacy, and Wide World of Horses, the Association works to keep the vaquero tradition alive in today’s equine industry.

For information on the National Reined Cow Horse Association, call 580-759-4949 or visit the NRCHA Official Web Site at www.nrcha.com.

Find your next reined cowhorse on myhorseforsale.com.