Frequently Asked Questions

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Once the managing partners and the training team have aligned on the prospective horse, on race day an owner or authorized agent drops the claim slip for a horse in the claiming race.  This slip is simply a index card which includes the horses name, the managing owners name and license number, and trainer.  The account balance is validated to confirm funds are sufficient to cover the claim plus tax within their horsemen account certified by the track paymaster

When the gates open, ownership of the horse instantly changes to the new owner. If the horse earns a purse in the race it goes to the former owner. Immediately after the race, the new owner’s groom takes the horse to his new barn and the paymaster transfers the sales proceeds to the former owner.

If more than one owner puts in a claim for the same horse, a “shake” ensues immediately after the race. The “shake” is nothing more than putting numbered balls in a genie bottle and pulling out the winner. There can be a two-way shake or even as many as a fifteen-way shake.

For additional information: NYRA Claiming Rules

There are four primary classes of horse racing.  

1. Maiden races: For horses that have never raced, or never won a race.
2. Claiming races: All horses are at risk of being claimed, Claiming races often feature inexperienced or ageing runners. 
3. Allowance Races:  An allowance race fields horses that all meet the same criteria, such as age, previous runs and maximum wins. Allowances are then made to the weight they carry, depending on other criteria like jockey experience and sex of the horse.    Allowance optional claiming races:  An optional claiming race is both a claiming race, for horses who can be claimed for a specific price, as well as an allowance race, for horses who can’t be claimed…because they fit the allowance conditions laid out in the condition book.  Horses that have run out of allowance criteria due to winning, eventually are required to be eligible for claim.
4. Stakes races: Under the umbrella of stakes, races are restricted and graded stakes races.  Graded stakes races are further broken down into Grade I, Grade II, and Grade III. 

A maiden claiming race is the lowest class of horse racing, and Grade I is the highest.

Owning your first thoroughbred can be one of the most enjoyable experiences you'll ever have.  As an investment, it's important to remember to treat it like an investment.  If treated like a business, the IRS provides many similar protections and write-offs as if you invested in other businesses or physical property.  TL:DR Yes, actively owning horses can become a write-off!(Requires your ability to pass the IRS hobby loss test).  If successful, a second test is taken to decide when and how much you can write-off.  Horse racing investments and partnerships will typically satisfy the hobby loss test.  It's important to document any business expenses if you're treating horse racing as a business, for examples: your time, effort, research, travel, networking, educational courses, meetings and other business activities.  

Test #1: Hobby Loss Test

Test #2:  Passive or Active Investor Test