Bill > HR1112

This bill modifies the Internal Revenue Code to change how racehorses are treated for tax purposes. Specifically, the bill reduces the holding period for horses from the current multi-year requirement to just 12 months when determining whether they qualify as Section 1231 assets. Section 1231 assets are special business assets that, when sold, can receive preferential tax treatment - allowing gains to be taxed at lower capital gains rates while losses can offset ordinary income. By reducing the holding period to 12 months, the bill makes it easier for racehorse owners and breeders to qualify for these tax benefits, potentially providing more financial flexibility in the horse racing industry. The changes would take effect for taxable years beginning after December 31, 2024, giving businesses time to prepare for the new tax treatment. The bill's short title, the "Racehorse Tax Parity Act", suggests its intent to create more equitable tax treatment for racehorse investments.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/1112/all-info