Scat Daddy retired

[Cannon Shell]

There is no way that he stands for less than $25k. If the yearling markets is solid and the Sheikh Mo boycott doesn't spread, he may go as high as $40k.

[Cannon Shell]

To be a business you must produce a good or service. Owning horses does neither. You want to call it an investment? Fine. But a business? Try telling the IRS that it is a business. Hell, they dont even want to label owning horses as an investment.

[Dunbar]

Originally Posted by Cannon Shell

To be a business you must produce a good or service. Owning horses does neither. You want to call it an investment? Fine. But a business? Try telling the IRS that it is a business. Hell, they dont even want to label owning horses as an investment.

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

[Cannon Shell]

Originally Posted by Dunbar

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

[Dunbar]

Originally Posted by Cannon Shell

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

[Cannon Shell]

Originally Posted by Dunbar

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.

[Dunbar]

Originally Posted by Cannon Shell

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

[Danzig]

Originally Posted by Cannon Shell

There is no way that he stands for less than $25k. If the yearling markets is solid and the Sheikh Mo boycott doesn't spread, he may go as high as $40k.

that high?!


i'm in the wrong business. that just seems high to me...crazy crazy

[Cannon Shell]

Originally Posted by Danzig

that high?!


i'm in the wrong business. that just seems high to me...crazy crazy

I did not say it makes sense but look where stud fees are.

[Bogey]

Originally Posted by Cannon Shell

I did not say it makes sense but look where stud fees are.

I heard a rumor that you stated that Afleet Alex was sore before the '05 Derby. Can you comment on this.

[Cannon Shell]

Originally Posted by Bogey

I heard a rumor that you stated that Afleet Alex was sore before the '05 Derby. Can you comment on this.

Huh?

[Bogey]

Originally Posted by Cannon Shell

Huh?

I heard this 3rd party information and I always wanted to question you on it. I respect you as a true horseman, but I heard you stated that about 2 days before the '05 Derby? IMO if Jeremy doesn't head to the dead rail, AA wins the triple crown. Madcap Escape went to the dead rail in the Humana Distaff two race prior and it was like quick sand that afternoon and cost AA the triple crown IMO.

[Cannon Shell]

Originally Posted by Bogey

I heard this 3rd party information and I always wanted to question you on it. I respect you as a true horseman, but I heard you stated that about 2 days before the '05 Derby? IMO if Jeremy doesn't head to the dead rail, AA wins the triple crown. Madcap Escape went to the dead rail in the Humana Distaff two race prior and it was like quick sand that afternoon and cost AA the triple crown IMO.

Actually he was coughing his head off coming off the track a few days before the Derby.