HR 1113119th CongressIn Committee

Race Horse Cost Recovery Act of 2025

Introduced: Feb 7, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Race Horse Cost Recovery Act of 2025 would amend the Internal Revenue Code to classify race horses as 3-year property for depreciation purposes. In practical terms, owners and operators of race horses would be able to recover the cost of race horses over a three-year period (instead of a longer recovery period under current law) for tax purposes. The change would apply to property that is placed in service after December 31, 2022, effectively making the improvement retroactive to 2023 onward. The bill does not alter other tax provisions and would primarily affect the timing of deductions and the cash flow of race horse owners, trainers, breeders, and related businesses.

Key Points

1The bill adds “any race horse” to the list of property with a 3-year depreciation recovery period under MACRS (Modified Accelerated Cost Recovery System).
2This creates a 3-year depreciation window for all race horses, allowing faster cost recovery on federal taxes.
3Effective date: applies to property placed in service after December 31, 2022 (i.e., starting in 2023 onward; retroactive treatment).
4No other tax provisions are changed; the measure focuses solely on the depreciation class for race horses.
5Legislative action: Introduced in the House on February 7, 2025 by Rep. Barr (for himself and Rep. McGarvey), referred to the Ways and Means Committee.

Impact Areas

Primary group/area affected: Race horse owners, trainers, breeders, racing syndicates, stables, and other businesses involved in the ownership and operation of race horses; tax professionals serving these clients.Secondary group/area affected: Financial institutions and investors involved in the race horse industry, and accountants/advisors who prepare and analyze depreciation schedules.Additional impacts: Potentially increased early-year cash flow for the racing industry due to faster tax deductions; potential effects on federal tax revenue depending on uptake and other economic factors; consideration of retroactive applicability for 2023 and beyond.

Generated by gpt-5-nano on Nov 18, 2025