What... the two races they faced eachother? LOL

Scat Daddy didn't have the best of trips in the Hopeful and still pressed on. I still believe him to be the better of the two.

I'm entitled to my opinion...

Forgot about the Derby by the way... sorry. I don't think it's fair to count that race anyway considering Scat Daddy was injured in that race.

Yes, you're entitled to your opinion, but when it has no merit others can point that out. Scat Daddy had his fair chances against Circular Quay and got drowned by him every time.

You like Scat Daddy. Good for you....really. But, stop pretending he is something he was proven on the racetrack, the only place scores are really settled, to be.... the lesser of the two horses being discussed. He had his chances, at different distances, and failed each time.

A professional gambler can be in the "business" of gambling, with no obvious "good or service" produced. That is, the IRS will accept a Schedule C filing from a professional gambler if certain conditions are satisfied, so the "good or service" requirement is not absolute.

I don't know a thing about how they handle racehorse ownership, however.

--Dunbar

Schedule C. Unfortunately for the self-employed, just filing Schedule C may be the biggest red flag of all. Consider these figures. Normally, if you earn between $50,000 and $100,000, your chance of being audited is about one in 100. File schedule C, with about the same income, and the odds nearly double to a frightening one in 50. "If you're self-employed, it's very hard to avoid an audit," says Renn. "It's almost guaranteed that if you file Schedule C long enough, you'll get audited."

Experts agree that the IRS carefully scrutinizes Schedule C. Among the agency 's favorite red flags here: A too-small bottom line. A large discrepancy between gross and net income may arouse suspicions of expense padding or improper deductions. The IRS is particularly likely to challenge travel and entertainment expenses and home offices (more on this below), so make sure your documentation is good.

Running in the red - a negative bottom line - is a sure attention grabber, particularly if it continues for several years. Generally, if your business loses money three (or more) out of five consecutive years, the IRS will assume it's just a hobby. In that case, you can deduct expenses only up to the amount you earned. This doesn't mean that you can never take a deduction for a persistent money loser - but the onus is on you to prove that it's a legitimate business. Di Re suggests fortifying your case with a business plan, careful records, and business bank accounts separate from your personal accounts. "Do everything in as business-like manner as possible," Di Re advises

CS, this is apparently quoted from some article. What was it?

I agree with some of the article. Filing a Sch. C probably ups your audit chances. But it is hardly a "frightening" prospect. I've been filing a Sch. C for my gambling biz for at least 15 years and have yet to be audited, despite several other oddities and red flags in some of those years. (most notably, 3 years where my joint return used the Foreign Earned Income Credit). I'm also in contact with dozens of other pros who use Sch. C, and audits are rare events. (More often someone will have trouble with his/her state return.) Most serious players do keep fairly meticulous records, so the rare audit usually has a favorable result.

Being a racehorse owner may be an entirely different matter. If a business consistently loses money, then continuing to file a Sch. C would probably invite scrutiny sooner or later.

--Dunbar

I would think that a professional gambler would be considered in the same vein as a day trader/investor. I would very much doubt that a horse owner could claim the same, though I guess some have tried.

Interestingly, there are some pro gamblers who would be better off NOT filing as a business, but rather as "other income". This happens when expenses are not large enough to make up for having to pay self-employment tax. I would not be totally surprised to hear at some point that the IRS is insisting on someone reporting his/her gambling income as a business, though I know of no case where that has yet happened.

--Dunbar

So far one of the reasons that I have read of Scat Daddy's retirement is his owners were concerned about his stud value dropping if his performance didn't improve next year. Is it just me, or have owners become obsessed with this? Steve made a good point on ATR when he said that the greatest horses in history used to run like crazy, and (get this) some of them even lost once in awhile. If their stud fees didn't decrease because of these losses back then, why are owners so worried about losses affecting stud fees now? Are owners being hypersensitive or what?

I also find it odd that a horse would be retired after its sophomore season when it is a known fact that many horses are still developing as a three-year old. Look at how many horses became serious contenders after turning four. It seems to me that a number of horses that are retired after three are missing out on a possibly stronger year at four. If black type does increase the amount of a horse's stud fee, why not give the horse a chance to earn more black type by running him at four?

From what I understand, his injury was pretty serious... once a horse blows a tendon like that, they don't typically come back 100%. Believe me, I wish he was running still... I would have liked to have seen him again at Toga this summer. :(

Good point. Look at this years older horse division. You dont have to be much faster than a solid $75k claimer to be competitive in Graded company.

You are right about Scat Daddy's injury pretty much putting an end to his career, but it was suggested that he was going to be retired at the end of this year regardless of his health. Either way it's a shame.

Agreed...

It sucks that we only see a horse have like 8 starts before they're taken to the shed. It just seems like it defeats the purpose of breeding for a real racehorse.

Even tho he ended up shooting blanks, Cigar was a good example.