H.R. 1113, the Race Horse Cost Recovery Act of 2025, modifies the tax code to allow horse owners and breeders to depreciate all race horses over a 3-year period for tax purposes. Currently, tax depreciation rules treat different types of race horses differently, but this bill would standardize the approach so all race horses qualify for the faster 3-year recovery period, making it easier for owners to deduct the cost of acquiring or breeding horses. The change applies retroactively to horses put into service after December 31, 2022, meaning property owners can claim back taxes based on this accelerated depreciation schedule. The bill provides a tax benefit primarily to the horse racing industry, including breeders, owners, and trainers who invest in race horses. No new federal funding is allocated by this legislation; rather, it reduces federal tax revenue by allowing larger tax deductions for race horse investments.
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