For decades, breeding, racing, boarding, pleasure riding, dressage, training, syndication, therapeutic riding, horse rescue, and other equine professionals have counted on Naden/Lean for superior service and unparalleled responsiveness to their needs. Our team of equine professionals constantly monitors IRS tax law changes and how they apply to the equine community. Equine accounting (and other related horse tax and consultative services) is a core competency of our firm.
Equine organizations and individuals that choose Naden/Lean do so because they know that we have taken the time to understand the unique challenges that face the horse community not only in Maryland, but nationally as well. By taking this industry expertise into account, we are better suited to offer strategies and suggestions tailored to your specific needs.
Whether you are purchasing your first share in a Thoroughbred, have a six stall boarding facility on a farm or have a breeding operation with over two hundred horses, we can help guide your equine tax and accounting strategies.
Our Services
- Tax planning and consulting
- Tax preparation
- Business entity selection
- Tax benefits and consequences of conservation easements
- Depreciation rules unique to the equine industry (for a depreciation schedule, click here)
- QuickBooks set-up
- Business start-up
- Bookkeeping services
- Establishing internal controls
- Business valuation
- General ledger set-up
- Estate planning
- Computer and network set-up
- Raising capital
- Chart of accounts set-up (for a sample chart of accounts, click here)
Testimonials
“I just wanted to drop you a note and let you know how much I appreciate the good work Naden/Lean has done for me. Four years ago I purchased a horse property and started a small breeding and boarding business. Before I even settled on the property, I was given expert assistance by one of your employees, Lance Jacob, who made sure everything was in order with my new limited liability corporation.
Things that would have been very confusing to me as a new equine business owner, were clearly explained by Lance. In early 2007 I purchased a much larger property, expanded my business focus to include sales and training, and now have contractors and employees assisting me in the daily operations of the farm. I have probably asked Lance a million tax-related questions, and he always takes the time to thoroughly address, and research, if necessary, my concerns. In addition to making sure my books are in order, I usually receive a hefty refund on my income taxes, I know, because Lance is so on top of the relevant equine business regulations. I am very confident knowing that Naden/Lean is on the job!
Furthermore, it is refreshing to work with a firm that is so active in the equine community. I have benefited from Naden/Lean's generosity of its resources, attending seminars where Naden/Lean employees have spoken to horse enthusiasts about relevant tax issues, and even donating a tax return preparation to my non-profit dressage organization for its annual silent auction--the club's major fundraising event.
In closing, thanks for all your good work on my behalf. I will continue to let all my friends know about the excellent services offered by Naden/Lean.”
Shari Glickman
GoodNess Ridge Farm, LLC
Resources
We support the wonderful efforts undertaken by these organizations on behalf of the equine community: the Mid-Atlantic Farm Credit, The Maryland Horse Council, The Maryland Horse Industry Board, the Equine Studies Department at the University of Maryland, Maryland Horse Breeders Association, Potomac Valley Dressage Association, WHINNY.org and the American Horse Council, Loudoun Horse Association and the Maryland Stallion Station.
Another way we lend support to the community is in the form of professional speakers well-versed in equine taxation and accounting issues.
Ask the experts: Lance Jacob or Darryl Bodnar. (800) 772-1065 or (410) 453-5500.
Lance Jacob presented a talk entitled, Unlocking the Mysteries of LLCs along with Kate Masterton, Esq at the Horse World Expo in Timonium, Maryland on January 16th 3PM.
Lance Jacob was quoted in two equine accounting articles recently, “For Love or Money – Defining you equine activity as a hobby or business.” in the Paint Horse Journal, January 2009 and “Bookkeeping 101 – Six tips for better horse keeping accounting practices.” in the Cutting Horse Chatter, June 2008.
Resources
Whatever the occasion, we’d be happy to supply equine accounting speakers for your event at no charge. For more information, contact Andrew Rose, Director of Marketing at (410) 616-2036. The following is a list of topics we are frequently asked to speak about.
For a PDF of these topics, click here.
Equine Topics
1. Horse Business Bookkeeping 101
When Quicken is not enough; should you go with general accounting software, such as QuickBooks, or with software specifically designed for Equine enterprises? What is your base unit of sale? Is it an hour of time? Is it a stall? How do you calculate the base costs of your unit so that you know what to charge? Is a payroll service really worth it? Learn how your P&L can help you figure out what to charge and how to make a profit; learn how to read spread sheets - it is important to know your numbers.
2. How To Start an Equine Business
You have your business plan - or you have been running a business for a while without one, and you know you need to file some sort of paper somewhere, but how do you get started? We will cover entity selection, financing options, record retention and other important tax related topics.
3. 10 Tips To Avoiding An Audit - Should You Turn Your Farm or Stallion Into A Business So You Can Write Off Expenses?
Are all hobby businesses are automatically flagged for audits? 10 things you can do to ensure you are running your business like a business.
4. The Business & Liabilities of Running an Equine Related Non-Profit: Insurance, Filing Taxes & Other
Insurance for your officers or board of directors - why you may or may not need it; legal and fiduciary responsibilities and liabilities of board, state and federal law, and how it applies if you are hosting or organizing a show. What if your non-profit doesn’t organize a show, but it owns assets, such as land, which it rents out to other organizations for shows? What is the liability exposure? Basic understanding of tax issues and reporting requirements related to non-profits.
5. Equine Non-Profit Budgets & Tax Returns
You’ll learn what a budget is, how to effectively use it, how to prepare an effective budget, who to include in the budget process, the need to update and monitor; budget as a management tool, how to interpret variances between actual amounts and budgeted amounts; the differences between a budget and a financial statement; differences between an income statement and cash flow budget. We’ll also be discussing the various components of a budget (income and expenses, capital budget, cash flow, etc.); what to consider when a budget indicates that a shortfall or deficit is coming including evaluation of expenses, restructuring considerations, consideration of dues increases and weighing these actions against the possible effects such as diminished service capabilities, possible membership losses, etc. We will also discuss the need for budgeting when embarking on a capital campaign. Three basic financial statements: financial position, operations and cash flows; the differences between the cash basis of accounting and the accrual method; three categories of net assets (unrestricted, temporarily restricted and permanently restricted); difference between designated and restricted funds; functional expense breakdowns, grant accounting, donated services and more.
6. Equine Non-Profit Bookkeeping 101
What if you have income from membership dues, shows, and sponsors? If we don’t technically “bill” for anything, can we just stay in Quicken? How do we log pledges on the books? How do we log pledges to our organization and pledges to others? What are the accounting software options? This course will teach you:
- How select which software product is best for you
- Double entries
- Importance of understanding garbage in/garbage out
- Setting up your Chart of Accounts
- Entering clean balances
- Establishing vendor databases
- Features such as: report running, closing of books, payroll and reconciliation
- Common misconceptions: no audit trail and lack of security
- Establishing internal controls
- Standards and procedures
- Understanding trial balances
7. Hobby Loss Rules
You’ve been absorbing those fencing, farrier, vet and barn bills for long enough. Has your hobby grown into a potential business? How do you get the IRS to accept the fact you are running a business? We will explore different ways to structure your equine passion into a business thus enabling you to write off some of these expenses
8. Estate Planning
You’ve spent a lifetime accumulating it, now how can you pass it along? We’ll discuss tax and investment strategies that will enable you to pass your estate to your heirs without selling the farm. Planning and implementation are the two biggest hurdles that most people face.
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Media
LPT Leading Race to Preserve Horse Country –Daily Record Article
Racehorse No Different than Copy Machine to IRS –Daily Record Article
Look! That's Our Portfolio in the Winner's Circle –New York Times Article
University of Maryland Equine Studies 2008 –Newsletter
From the Law Office of Kate Masterton:
Moore v. Landes legal ruling, 2006 WL 29190064 (Ky.App.2006) — Moore was the high bidder for a horse at Fasig-Tipton’s Timonium horse auction. The auction’s Conditions of Sale (“Conditions”) required that any corrective surgery on a sales horse must be disclosed by the seller. Seller did not disclose, and the prepurchase veterinary exam did not reveal, that the horse had had invasive joint surgery a year before the sale.
Kate Survives Horse Fall
As many of you know, last August I was involved in a serious horse accident which left me with stitches, cracked ribs, a separated shoulder, and a torn rotator cuff (but like any good horsewoman, when I came to, the first thing I said was, “Is the horse all right?”). Though many people said, “Poor you,” I consider myself very lucky—I neither died nor was crippled, as occurs in so many horse accidents. And like any good estate planner, I was glad that I had an Advance Medical Directive and a Durable Power of Attorney; had I been more seriously injured, at least my husband would have been able to know and implement my medical wishes, and manage my financial affairs until I regained my ability to do so.
Clients often approach me first about a will, but I believe the first priority is to plan for managing a health crisis during life, when it really matters to you; after all, what happens to your money after you die will not matter to you then.
For rest of article and newsletter, click here.
Conservation Easement Boon
The Act creates great opportunities for landowners to conserve property and realize significant federal income and estate tax savings. The new law only applies to permanent conservation easements donated in 2006 and 2007. A conservation easement lets landowners to donate some of their land development rights to a conservation charity such as a land trust in so as to permanently protect important natural resources on the property. A conservation easement lets the landowner continue to own, use and live on the property; sell, gift or otherwise transfer the property subject to the easement’s terms; makes it easier for rural families to leave land to their children by reducing or eliminating the burden of the federal estate tax; and protect the natural areas, open space, water and rural character of the land. The new law:
- Raises the deduction a landowner can take for donating a conservation easement from 30% of adjusted gross income (AGI) in any year to 50% AGI;
- Allows qualifying farmers and ranchers with more than 50% of their gross income from agricultural activities to deduct up to 100% of their AGI; and
- Increases the number of years over which a donor can take those deductions from 6 years to 16 years.
- For the full, Winter 2006 Newsletter from Kate Masterton, Esq., equine lawyer, click here.
For the full, Winter 2006 Newsletter from Kate Masterton, Esq., equine lawyer, click here.
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