The National Directory of Certified Public Accountants

Ask A CPA - Depreciation

Depreciation - Race Horses

Bonus depreciation on purchases of race horses was reinstated in 2013 at 50%, which was the 2012 rate. The expense allowance was increased to $500,000 for this year and retroactively increased from $125,000 to $500,000 for horses purchased in 2012. Accelerated depreciation for young racehorses continues through 2013. Taxpayers can depreciate racehorses that are 24 months and younger when purchased and placed in service using a three-year schedule rather than the previous seven-year schedule.

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