This week Representative Andy Barr filed a bill to alter the Internal Revenue Code to eliminate a disincentive to investing in horse. The Bill, HR 998 can be found here: HR 998
While I am generally critical of Rep. Barr, in fairness I should not when he is working on behalf of the citizens and businesses of his district, and this is clearly a case where he is. Obviously the current IRS code is an ungodly mess, and should be reworked root and branch, but until that time there is nothing wrong with fixing a glaring problem like this.
Here is Representative Barr’s statement on the Bill: On Wednesday, I introduced H.R. 998, the Equine Tax Parity Act, a bill that would finally eliminate a 44-year-old tax provision that discourages investment in the equine industry. This legislation would bring much-needed relief for an industry that distinguishes our Commonwealth worldwide. I believe this legislation can play a vital role in putting Kentuckians back to work.
The Bill is very simple, actually only two paragraphs long, as says:
To amend the Internal Revenue Code of 1986 to reduce the holding period used to determine whether horses are section 1231 assets to 12 months.
- Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. REDUCTION OF HOLDING PERIOD TO 12 MONTHS FOR PURPOSES OF DETERMINING WHETHER HORSES ARE SECTION 1231 ASSETS.
- (a) In General- Subparagraph (A) of section 1231(b)(3) of the Internal Revenue Code of 1986 is amended by striking `and horses’.
- (b) Effective Date- The amendment made by this section shall apply to taxable years beginning after December 31, 2012.