Del Camino Equestrian Enterprises,
Inc.
Mailing Address:
3822 E. Sahuaro Drive, Phoenix, Arizona,
85028-3442 United States of America
Tel: 480-242-9490
Fax: 602-953-9347
Our senior
citizen horses are loved and valued team members at many stables. They are useful
well into their twilight years, because we didn't wear them out or break
them in their youth or their prime. Years of training and experience
does not go to waste, but teaches the next generation of horsepeople.
One of the missions of Del
Camino is to help horse owners find timely information that guides them
through the journey of finding their horse an appropriate second or third
career. We want to keep our seniors as fit, as active,
as contented as possible, as long as possible. It can be done.
We dedicate this section to a few
of many beloved Del Camino horses who were given to us by their owners:
Spirit, Heineken, Smokey, JJ, Shifty, and for a couple of lovely years,
Justice.
Thank you for having graced our
lives, and taught so many people the joy of horsemanship.
If you are looking for a charity or business to donate your horse to for a new career please visit the Retirement Jobs for Senior Horses page for job descriptions and links, or go to that job's page (see left column) directly.
If you are considering donating your horse due to unexpected life changes or financial circumstances that are urgent, please visit the Emergencies page for links to assistance, since donation for a tax deduction is often a slow process.
As we find a broken link, we
remove it if we cannot easily repair it.
Visitors are encouraged to
join discussions in the forum
to share their knowledge or experiences. There are no reviews on
this page. If this page is helpful to you, please drop us a note Feedback.
Del Camino
does not endorse, approve, guarantee, warranty, or otherwise recommend any
product, service, vendor, book,
article, website, webzine, magazine linked on this page
NOTE: The actual tax
deduction depends on the type of charity to which you are donating your
horse. Some charities qualify you for a 50% of the value of
the donation deduction, others for 30% of the value. Consult your tax
professional or use high quality tax preparation software. Donating
a horse worth $1,000 may convert to a $500 or $300 deduction, depending on
the type of charity. The value is further calculated and limited based on your income tax bracket.
NOTE: A change in the charitable deduction was proposed in 2009 by the current administration. Presently, the actual final deduction also depends on your income tax bracket. President Obama wants all taxpayers to be limited to a maximum of 15% of AGI for total donations, regardless of their income tax bracket, instead of up to 38%.
This proposed reduction in the tax benefit of donating to charities has not been implemented for 2009 by Congress.
Many horse owners hear that they could donate
their horse to a charity, instead of selling it. They hear that they
can get a tax deduction just like donating a car or other item that the
charity then sells in order to obtain cash for its needs. This may be
an attractive option for horses that still have many good years ahead of
them and their owner has sufficient cash flow to carry the horse until it
sells.
Here's what we learned
through researching this option, prefaced by the disclaimer that we are not
CPAs nor tax accountants, and that is who should advise you. Further
the tax laws seem to change nearly every year, concerning limits,
carryovers, documentation required, etc. So get current year advice
from your CPA, not just how it worked for a friend four years ago.
Whatever you donate (car, horse, etc.) will not
be tax-deductible if you receive services or goods of value in exchange for
it. That is barter, not donation. So you must relinquish title
to the horse completely, in exchange for nothing of value. If you
donate a $2,000 horse to your college alumni association, and receive season
tickets to the football games worth $500, the value of the donation is
$1,500 ($2,000 less the $500 retail value of the tickets.)
Horses valued under $500 do not have to be appraised, but you must have a receipt that gives a clear and complete description of the horse and credible documentation of how you arrived at its fair market value as of the date of the donation if the value is $250 or more. For a value under $250 a receipt that proves the donation does need to give a
description of the donated horse and identify the charity properly.
The dollar value you can claim is the current
market value of the item. You cannot claim the original purchase price. If, for example, you bought the horse for $15,000 five years ago at age 10, and it is now age 15 and lame, it is not worth $15,000, unless you get a written appraisal from a recognized qualified equine appraiser to establish this, or have the bill of sale showing that is what the charity sold the horse
for. Advertisements for similar sound horses cannot be used to establish the value of your unsound horse if it's value is $500 or more.
Typical professional appraisals cost about $200. The person doing the appraisal needs to have appropriate verifiable expertise and cannot have a conflict of interest such as being employed by or volunteering at the charity, being the trainer marketing the horse for a fee, or a relative of the donor. You should use a professional equine or livestock appraiser who is recognized by the I.R.S.
to avoid having your appraisal disallowed.
Les Scott of Lazy S Ranch in Florida is an ASEA member approved by the IRS and has helpful information on his website.
After the charity sells the horse, you can use the net sales price to determine the value of the donation. Ask the charity to give you a letter showing the
cash value to them of your donation and their 501(c)(3) status and Tax Identification Number (TIN).
If the horse was a business asset, or you were given the horse as a gift or inheritance, you need your CPA to help you. It matters whether the horse was a capital asset you were depreciating, or an inventory asset of goods for sale.
If an inventory asset, it also matters when the horse was placed into inventory on your books. Essentially, you cannot both write down the inventory losses and take the charitable deduction, but you do have to get the asset off your books properly.
Private individuals may not claim the
cost of the appraisal as part of the donation.
If you received the horse as a gift or inheritance, your basis (cost) is zero. So, like furniture or a car, the actual condition is important to the current fair market value of the donation. If you want to claim a value of $500 or more, you will need either the actual amount the charity was able to sell it for in writing from the charity, or a written
professional appraisal.
Any expenses you incurred to maintain the horse while it belonged to the charity, such as board, shoeing, vaccinations, and exercise you paid for, substantiated by receipts, could also be deductible donations. Your personal expenses such as travel and time to maintain and sell the horse are not deductible.
While your horse is being marketed to raise cash for the charity, if you keep the horse at home rather than paying
to board it, and spend the time showing it to potential buyers who come to
test ride it, you may not be able to deduct all of your true costs, though the cash outlay may be much less. You can only deduct its
specific expenses during that time, like veterinary and shoeing and
advertising.
Just as a home office must be a specific spot, measured
in square feet, to be deductible, charging yourself board gets a bit tricky,
especially if he isn't the only horse in that pasture with a run-in shed.
Remember that you must transfer title to the horse to the charity first, for
any expenses to be deductible at all. Then you are essentially getting
a tax-deduction for some of the cost of providing their horse foster care
and for advertising it. You should be able to document continuing
reasonable efforts to actively market the horse, or your expenses may be
disallowed. The IRS is not going to pay you to keep your own horse.
None of the expenses you keep track of are deductible until the year the horse actually sells.
Generally, like individuals, businesses that donate horses are limited to the current fair market value (documented by appraisal for values of $500 or more).
Be sure to get current advice from a qualified business tax professional on this issue, because you must calculate your BASIS in the horse, either as an asset or as inventory, and some expenses are regular business deductions, or not deductible, and some can be associated with the donation. (See IRS Publications
544 - chapter 3, Sales and Other Dispositions of Assets and 551 - Basis of Assets. You need Adobe Acrobat Reader for these downloadable files.)
If your business owned the horse as an
asset, and you have depreciated it, or claimed a casualty loss for its reduction in value, this can further reduce the amount you
can claim as a tax deduction, just like the sale of any other asset for
which you already received the benefit of depreciation expense or loss deductions.
Businesses can usually deduct the cost of selling an asset, including
appraisal costs and advertising expenses. However, these costs are not
usually deductible when donating a horse.
The IRS rules differ somewhat for valuing the donation of a horse that is business inventory that you bred or purchased to sell, rather than use to conduct your business. You must follow directions based on whether the horse was included in your opening inventory for the year, to determine whether the cost and donation are simply an operating
expense in cost of goods sold, or if you can treat it as a donation at either your cost basis, or fair market value, at the time of donation.
Most non-profits that will accept horses rather
than cars, boats, etc. do not want to incur any expense or responsibility
for the item before it is converted to cash. That means cars, boats,
etc. are immediately sold to wholesale brokers for whatever they will net in
hard cash for the charity. Their sole interest is in converting the
asset into funds they can spend. We are discussing here charities that
are not involved with horses.
To accept a horse, they expect the person
donating the horse to continue to pay for its maintenance until they sell
it. If you transfer title first, you can also deduct the cost of
maintenance you incur until the horse is sold. You cannot deduct the cost of
maintenance if you have not transferred ownership to the charity.
Someone who has the time and knowledge to market the horse must actively do
so, through networking, or paid advertising, or both. This can be you,
your trainer, or another person the charity chooses.
Example: Eighteen year old $25,000 show
jumper can no longer jump and cannot pass a pre-purchase veterinary
soundness exam, but could do light flat work if properly maintained.
Current market value as a pleasure horse on the flat walk-trot-canter is
$5,000 due to excellent ground manners and gentle temperament. You
donate him to your favorite Cancer Foundation by signing over title to the
horse. You pay to board him for three months at $500 per month with
turnout service, totaling $1,500. You pay for trim and shoes 3 times
at $100, equaling $300. You pay for his fall vaccinations, $125.00.
A trainer sells the horse for $4,000, less commission of 15% $600.
This is a $3,600 net check to the charity. This generates the tax-deductible
donation of $3,600 for the horse, plus $1,500 plus $300, plus $125 for a
total donation of $5,525. You keep all receipts for expenses you paid
which are dated after the title was signed over to the charity. The
amount deductible cannot exceed 30% of your adjusted gross income for the
non-cash item (the horse) or 50% for the cash (payments for maintenance of
the horse until sold). Sometimes you can carry the excess forward to
apply in another year. This varies, so get expert advice.
This route is attractive for people who first, have the
cash flow to maintain the horse for however long it takes to sell him, and second, need
the tax deduction, and
a) have high confidence that their trainer can
devote the time to marketing the horse, or
b) the charity has someone who has the expertise
and time to do so, or
c) can market the horse themselves on behalf of
the charity.
If the numbers work, other issues may arise. Does the horse have to be moved from your ranch to the barn of a trainer you do not know who is taking the horse on consignment? This can be a good move, since the horse will be seen by the trainer's customers, and the trainer will get to know the horse's strong points, to be able to sell him. It could
also help you to detach emotionally by not seeing the horse every day. However, if the horse will not be kept exercised and groomed ready to show to a potential buyer, or have special needs met, it could take longer to sell him, and might even cost you more to maintain him per month. If you need the tax deduction, great. If the horse is insured, will the charity
continue the insurance until the horse is sold? This protects your deduction, as well as the care of the horse, so it may be worth continuing.
CAUTION: If you donate your formerly expensive, now "pet" horse to a charity that you are personally affiliated with, and do not really make a well-documented effort to sell the horse to convert the donation into a reasonable cash benefit to the charity, the I.R.S. may not approve. The I.R.S. may argue that you have used your position with
the charity to keep possession of the horse until it is nearly worthless, while eventually writing off its maintenance expenses. Be careful that you do not benefit more than the charity does from your generosity.
For many truly senior horses their market value is too low for major charities and most trainers to bother with the arrangements necessary to sell the horse, and the prospects of doing so are not very good. Realistically, a trainer at a busy show barn just might not have the connections to market in this low price range, or the time to do so for
such a small commission. The charity you are looking for in this case is one that would be delighted to get a $500 dollar donation in the end.
For low market value horses, the charities worth trying to partner with for a tax-deductible donation are those that benefit horses, and failing that, other companion animals, like dogs and cats, or even wildlife rescuers.
Among the best prospective charities for low market value horses are therapeutic riding centers, veterinary schools, and equine science departments of agricultural colleges. These non-profits are often very open to creative fund-raising, and, as animal-oriented institutions, very sympathetic to the situation of the animal. They may have
donors, volunteers, or students willing to buy the horse. Well-established non-profits with good fund-raising experience will understand the importance of the donation acknowledgement letter being dated and containing the correct wording, dollar value, and that you received nothing in return.
TIP: A horse rescue that is too full to take more horses, may still give you the benefit of their expertise to market your horse, refer leads of potential buyers in the right price range, and accept the proceeds of his sale when you find him a new home. See also our
Adoption Agencies and Rescues page.
Equine non-profits that will use the horse, such as therapeutic riding centers, equine-assisted mental health programs, equine-assisted education programs, equestrian Special
Olympics or Paralympics, or veterinary schools, that will use your horse, rather than sell it, are subject to another rule. (See Retirement Jobs for Senior Horses.)
The donation of a horse is tax deductible,
provided that the therapeutic riding center or veterinary school, or equine studies department of an agricultural college keeps the horse for a minimum of 3 years without
selling it. This is to prevent the donor from donating the horse, taking a tax deduction, and then buying or taking the horse back.
The center itself is not usually qualified, but in any event it is not allowed, to place a value on the horse. Most suggest that you value the horse by finding ads for similar horses in magazines such as The Horse Trader to use as proof for the IRS, or have it appraised, if the value is high enough to warrant the appraiser's fee. The appraisal fee is not
deductible.
If you donate the horse to a horse business that
is not a 501(c) non-profit, such as the local riding academy to use as a
lesson horse, you cannot claim a tax deduction.
However, since the business intends to use the
horse in a manner that directly generates revenue, the business is usually
willing to assume the cost of the horse's upkeep sooner. It is
reasonable to give the riding academy, dude ranch, trail ride operation or carriage ride service
anywhere from two weeks to sixty days to evaluate whether the horse will fit
into their program. During that time you may share expenses, and you
will want to make clear who is responsible for extraordinary costs that
unexpectedly arise. A specific well-written legal agreement is
well-worth the effort.
The business needs time to acclimate the horse
to their routine. Staff must find time in their schedules to get to know his
strong and weak points, and how best to use him. He is applying for a
job, and is on probation. Bad weather, an out-of-barn show, or other
issues may mean they do not have an opportunity to work with him daily
during the evaluation to make up their minds. If you oversell the
horse to them, and insist on a very short evaluation, or attach too many
strings to your offer, such as keeping the horse in a show barn stall,
blanketed, and on specific expensive supplements, you are more likely to
either
a) get the horse back at the end of the test
period, or
b) find that the horse was sold or given away
later because it did not work out.
On the flip side, an open-ended evaluation with
no deadline for a decision is not in the best interests of you or your
horse, and just drags out the time you must pay your share of his expenses.
There should be some reasonable incentive to bring the trial period to
closure.
In every other respect, follow the same due diligence as if you were donating the horse to a therapeutic riding center. Business-owned working horses may be in outdoor pens, while client show horses occupy the high-rent stalls. But the quality of their feed, water, handling, shoeing, and preventative maintenance should be equally good.
Get references, observe horses at rest, being handled, and working. Meet staff and customers, inspect tack, feed, and facilities, and check that the business is financially sound and likely to be in operation for the foreseeable future.
Stables specializing in using retired show, pleasure, and ranch horses as schoolmasters are few and far between. Most training stables are competitive barns specializing in training, showing, and sales. While they may keep a horse that is "between owners" to give lessons to new clients until they purchase their own horse, most do not
specialize in managing the health and work routines of older horses, or ones with special needs that are expensive to maintain. Look for barns that have at least a few horses to share the work, and that keep some horses for many years, including another senior or two.
Retired ranch, endurance or trail horses may or
may not be suitable for a "dude string" job. Unlike retiring arena horses, they are accustomed to the environment on the trail, but may not have the temperament to pack nervous tourists, or the stamina to cope with unbalanced weight over the terrain for longer rides.
The job of walking along the trail for an hour, turning around, and walking back may be just the ticket for your sweet old horse. The job of packing an unbalanced novice up a hill to a scenic lookout and back down again may not.
Most trail operations are looking for horses that
are not tenderfoots,
have good herd manners,
are not prone to bucking when irritated, and
are just as tolerant of beginners yanking on their mouths and kicking them as the best school horses,
will hold up for the number of hours per day and days per week necessary,
have few or no special needs.
DO visit in person any ranch you have placed on
your short list after reviewing their website or brochure, and talking to
the operator on the phone. You won't be making this trip regularly, so
make it at least once before your horse sets hoof on the trailer ramp.
Many special needs aged horses cannot live at
pasture. Some cannot eat grass. Some would get beat up and run
off the hay by younger horses. Some need daily medication. Some
cannot regulate their body temperature well enough to live outside all day
in summer heat or in winter cold. For your senior, ensure any dude string or lesson or training stable you
consider has small group covered pens, individual covered pens, or inside
stalls as options. Have the routine for turning out and exercising
these horses explained to your satisfaction. Remember that the
customer horses that are paying for training or turnout necessarily get
attention first in a busy barn.
Find out how hoof care and veterinary care is
handled. Your loved one will no longer be trimmed and shod by his
regular farrier, and no longer be examined and vaccinated by your trusted
veterinarian. Many semi-retired horses with good hooves doing very
light arena work go barefoot behind or on all four, but they still need
regular trimming, even if old hooves grow more slowly. Others need
shoes for support, in which case the farrier doesn't need any fancy
techniques, but needs patience with oldsters who may not be able to stand
for long periods with stress on a bad stifle, or arthritic hock, etc.
You really can't just rely on a good farm's general statement "we will schedule regular farrier work." Find out how long the current farrier has taken care of their existing trail or school horses, and how often he comes. If I could schedule my visit (since it may be my only one) on a day the farrier and even the vet will be there, that
would be ideal.
I would definitely
watch more than one lesson, preferably both a private lesson and a group,
or a youth and an adult lesson, to see examples of how my horse will be
handled, groomed, tacked, warmed-up, ridden, cooled-down, and put away.
In the case of a trail ride operation, I'd ride along for more than one ride
with different staff members if I could.
If you like one or two ranches, at
the end of your visit, ask for a couple of references from people
who retired their horse there. Follow up.
