equine

Article Danielle Camara

The equine industry has long balanced tradition with innovation. Today, the industry is entering an exciting era where data and AI are opening new possibilities for innovation—from improved health monitoring to more nuanced breeding decisions. For breeders, trainers, veterinarians, and farm operators alike, these developments offer fresh opportunities to complement experience and instinct with real-time insights, predictive analytics, and smarter decision‑making. Data and AI are no longer futuristic concepts—they are practical tools offering the ability to reshape the industry. 

Smarter Equine Health and Performance Monitoring 

One of the most promising areas for Data and AI in the equine industry is health and performance tracking. While not yet widely implemented across all operations, advances in wearable technology and analytics are making continuous monitoring more accessible. Patterns that once took months to observe, or were missed entirely, can now be flagged in real time. This offers opportunity for:

  • Early injury detection: AI can help identify subtle deviations in gait, stride length, or load distribution before they become clinical injuries. 
  • Performance optimization: Training programs can be personalized based on how each horse responds to specific workloads. 
  • More informed decisions: Data serves as a complimentary tool alongside trainer and veterinary expertise—not a replacement. 

Consider a racing stable using daily gait-analysis data from wearable sensors. Instead of waiting for visible problems, an algorithm detects a subtle change in a horse’s movement such as a slight asymmetry over several days. With this real-time alert, the team schedules a preventative veterinary exam and addresses the issue early, reducing the risk of a serious injury and keeping horses ready for competition. 

At a sport horse facility, trainers monitor heart rate recovery and training intensity for each horse across disciplines. Using AI models, they identify which conditioning routines reliably result in strong performance without overworking the horses. This information helps trainers adjust programs for each individual, ensuring every horse receives targeted care rather than following a one-size-fits-all approach. 

Data‑Driven Breeding and Bloodstock Decisions 

Breeding decisions have traditionally relied on pedigree analysis, historical success, and expert judgment. Data and AI are beginning to expand this foundation by offering additional  layers of analysis and bringing data from several places together for more efficient review. By analyzing bloodlines, performance traits, injury histories, and environmental factors, these tools can help support more informed decision-making. 

  • Predictive breeding insights: Machine learning models could offer opportunities to estimate the probability of desirable traits appearing in offspring. 
  • Reduced investment risk: Data can help bring additional clarity to high‑value breeding decisions. 
  • Continuous improvement: Models improve over time as new performance data becomes available. 

For example, a breeding operation evaluates stallion options using an AI model that incorporates pedigree compatibility, historical foal performance, and career longevity—helping prioritize crosses with higher projected success. 

Or perhaps a sales operation uses data analytics to identify undervalued bloodstock by comparing sale prices against predicted performance outcomes, improving ROI in competitive auctions. 

Operational Efficiency Across Farms and Facilities 

Beyond horse performance and breeding, Data and AI are starting to influence the possibilities within the scope of the business operations that support equine enterprises. While still an emerging capability for many organizations, integrated analytics platforms can connect financial data, barn management systems, and sensor data into a single operational view. 

This creates opportunities to move from reactive decision‑making toward more proactive planning. 

  • Optimized feeding and care plans: Aligning nutrition and health protocols with workload and metabolic needs. 
  • Resource and staffing optimization: Using historical data to better anticipate staffing and facility usage. 
  • Improved financial visibility: Gaining clearer insight into cost drivers and operational performance.  

A boarding and training facility analyzes historical stall usage, turnout patterns, and staffing levels to optimize schedules during peak seasons—reducing overtime costs while improving horse care consistency. 

A multi‑location breeding farm uses centralized analytics to compare feed costs, veterinary expenses, and outcomes across locations, identifying best practices that can be scaled enterprise‑wide. 

Looking Ahead: Competitive Advantage Through Intelligence 

What makes the evolution and adoption of these tools so compelling is the flexibility they offer. Data and AI can be adopted gradually, applied selectively, and shaped around existing workflows, allowing industry professionals to continue relying on their instincts and experience while gaining clearer, more efficient visibility into the day‑to‑day information that supports their decision‑making. 

As the industry continues to evolve, the opportunity lies in asking thoughtful questions about what information might add value, where small improvements could make a difference, and how technology can quietly reinforce the practices that already work.  

If you are interested in learning more or have specific questions, the  Data & AI team at Dean Dorton is here to help guide the conversation.   

Article Autumn Hines

If you own horses or run a farm, tax season can feel like a mad dash to the finish line. The good news: a few “big picture” rules drive most of the tax outcomes we see in equine and farm operations. This post highlights the items that tend to matter most: business vs. hobby status, whether losses are limited under the passive activity rules, how bonus depreciation can help (or hurt) your taxable income, and what to watch for when you sell a horse.

1) Business vs. Hobby: The Question That Drives Everything

One of the first things the IRS looks at is whether your horse or farm activity is a real “for‑profit” business or a hobby. This matters because hobby expenses generally aren’t deductible under current law. In other words, you may still have to report income from the activity, but you may not get the tax benefit of the related costs (including depreciation). For many owners, getting this classification right is the biggest tax issue of the year.

The IRS often uses nine factors to decide whether you have a profit motive. The theme is straightforward: Do you run the activity like a business? Helpful signals include quality books and records, separate bank accounts, working with quality advisors, and making changes when results aren’t trending toward profitability. Keeping notes on the business decisions you make—why you bought or sold a horse, changed trainers, adjusted breeding plans, purchased additional farmland, etc.—can be surprisingly valuable if questions come up later.

You may have heard about the “2‑out‑of‑7” rule for horse activities. Earning a profit in two of seven years can help shift the burden of proof, but it isn’t a free pass—and documentation still matters. If losses are expected (which is common early on), it’s worth checking in with your tax advisor about how you’re tracking income and expenses and whether your records tell a clear “business” story.

2) Passive Loss Rules: When Losses Don’t Offset Other Income

Even when an activity is a business, losses don’t always reduce your other income (like W‑2 wages or portfolio income). The passive activity rules can limit deductions unless you “materially participate.” One common way to qualify is participating in more than 500 hours during the year, but there are other tests, too.

This comes up a lot when owners rely on trainers, farm managers, or employees. The IRS generally wants proof of what you did and when you did it, so a simple time log and a file of key emails/texts (vet decisions, training changes, purchase/sale approvals) can go a long way. If losses are being suspended year after year, it may be time to revisit documentation, involvement, and how the activity is structured.

3) Bonus Depreciation: A Helpful Lever for Big Purchases

If you bought horses, equipment, or made major improvements, bonus depreciation may be a big deal on your return. Recent law changes made 100% bonus depreciation available again for certain qualifying property acquired and placed in service after January 19, 2025. In plain terms, that can allow you to deduct the full cost in the year the asset is ready to be used—rather than spreading the deduction out over several years.

The key phrase is “placed in service,” which generally means the asset is ready and available for its intended use. A racehorse is often placed in service when it starts training or racing; breeding stock when it’s available for breeding. For equipment, barns, fencing, and certain land improvements, it’s when the property is ready for use—not necessarily when you signed the contract or wrote the check. Because large deductions can also affect estimated taxes and other items on your return, timing is worth planning instead of leaving to chance.

4) Selling a Horse: Same Sale Price, Very Different Tax Results

When you sell a horse, the tax answer starts with a simple question: why did you own the horse? If you bought the horse mainly to resell (for example, pinhooking), the horse is typically treated like inventory, and the profit is generally taxed as ordinary income. If the horse was used in your business operations – such as breeding stock or a racehorse – part of the gain may qualify for long-term capital gain treatment if the horse was owned for over 24 months. One more wrinkle: depreciation you claimed on the horse may be “recaptured” if the horse is sold for a gain and taxed at ordinary income rates. That’s why two sales that look similar economically can produce very different tax bills.

How you structure the sale can matter, too. An installment sale (getting paid over time) may let you recognize gain over multiple years, which can help with cash flow and tax planning. However, installment reporting generally doesn’t apply to inventory, and depreciation recapture is usually taxed right away—even if you haven’t collected all the payments yet. Understanding the tax impact can help with cash flow planning in these sale transactions.

Not every “taxable event” is a planned sale. If a horse dies, insurance proceeds can sometimes be higher than your tax basis—creating taxable gain. In many cases, that gain can be deferred if you reinvest the proceeds into a qualifying replacement horse (or horses) within the required time frame and follow the applicable rules. Because the deadlines can come up quickly, it helps you to know this option exists before you need it.

Horse and farm taxes can get technical fast, but most issues come back to a few basics:

  • Documenting business intent
  • Tracking participation
  • Planning the timing of big purchases
  • Thinking through the tax angle before a sale closes

If you’re unsure how your activity is being classified—or you had a major purchase, sale, or insurance event—consider a quick check‑in with your tax advisor before filing. A short planning conversation now can prevent expensive clean‑up later.

Article Dean Dorton

Selecting accounting software may seem like a back‑office technicality, but for equine businesses, it’s often a strategic decision that directly shapes operational efficiency, data transparency, and long‑term scalability. The right platform can unlock meaningful insights and save hours of manual work; the wrong one can lead to costly rework, limited visibility, and operational complexity that grows over time. For equine business owners — whether launching a new venture or upgrading from a legacy system — this decision is more relevant than ever. 

Why Accounting Software Choice Matters More Than You Think 

Modern accounting platforms do far more than produce profit and loss statements. Today’s leading systems offer multidimensional reporting, automation, seamless integrations, and can consolidated views across entities — all critical capabilities for equine operations managing a farm, multiple departments, and an ever-changing horse roster. 

Here are some key features to look for as you consider the many options available today: 

Reporting That Mirrors Your Business — Not the Other Way Around 

The most powerful accounting platforms allow equine businesses to create reports that reflect the true complexity of their operations. With the right software, reporting goes beyond standard financial statements and opens the door to deep operational visibility. 

For example – Sage Intacct’s multidimensional reporting allows users to pull reports by department, location, or even individual horse — making it possible to analyze revenue, expenses, and performance in a way that aligns with how the business actually operates. For equine owners seeking to understand profitability by horse, location, department, or trainer, this level of granularity can be transformative. 

Multi‑Entity Abilities for Multi‑Entity Businesses 

Equine businesses often include multiple operations, each with unique financial needs. Choosing software that supports multi‑entity structures ensures you can easily consolidate operational and financial reporting. Systems designed for this complexity eliminate the manual spreadsheets and duplicate data entry that plague businesses using software not built for multi‑entity management. 

Software That Plays Well with Others 

In today’s tech environment, no single platform can do everything — and it shouldn’t have to. Picking software that integrates smoothly with specialized apps allows you to create a best‑in‑class financial ecosystem tailored to your operations. 

Our AFO Equine team frequently pairs accounting platforms like Intacct and QuickBooks with applications such as BILL, which provides advanced AP and AR capabilities and integrates seamlessly with both systems. Integrations like these enhance automation, expand reporting opportunities, and link operational data directly into your financial system — reducing errors and improving efficiency. 

Harnessing AI & Automation to Save Time 

Leading accounting software providers are investing heavily in automation and AI, which enables small accounting teams to work more efficiently. Examples include automated AP/AR workflows, smart document capture, and auto‑classification of transactions.  

Even third‑party tools are innovating rapidly — for instance, BILL’s automated W‑9 collection feature, which requests and reminds vendors to submit their documentation without requiring manual follow‑up from your team. These innovations free teams to focus on higher‑value work rather than repetitive manual tasks. 

The Hidden Cost of Choosing Wrong 

Switching accounting software is possible — but it is rarely painless. A transition often involves redesigning the chart of accounts, remapping historical data, re‑implementing integrations, and rebuilding reports to finally gain the visibility you needed all along. For many businesses, the time and money spent correcting a poor initial decision far outweigh the upfront investment of selecting the right software and setting it up properly. 

For equine business leaders, accounting software is more than a financial tool — it’s an operational backbone, a strategic insight engine, and a long‑term investment. The right platform strengthens decision‑making, improves efficiency, and scales as your business evolves. If you’re considering a software upgrade or starting fresh, our AFO team is here to help you think strategically, select the right system, and implement it in a way that sets your business up for long‑term success. 

Contact us today.

Article Dean Dorton Admin

Virtual Event

March 4 @ 1:00 pm – 2:00 pm EST

Join Dean Dorton’s equine industry experts for a live webinar on Wednesday, March 4, 2026, at 1 p.m. EST. 

Jen Shah, CPA, Tax Director at Dean Dorton, and Joe Daugherty, CPA, Tax Associate Director at Dean Dorton, will discuss key reminders and tax considerations for horse and farm owners preparing their 2025 tax returns.

Participants may earn up to 1 hour CPE.

Watch the Webinar

Continuing Professional Education Credits

CPE Credit: Participants are eligible to receive up to 1.0 CPE credit.

Participants will:

  • Identify key tax planning strategies specific to horse and farm ownership
  • Understand common tax pitfalls and compliance considerations

Fields of study:

  • Taxes (1 CPE Credit Hour)

In order to be awarded the full credit hours, you must be a present and active participant throughout the entirety of the seminar by having the presentation up on your main screen. You must also answer the polling questions in each session that you are present for.

Prerequisites: None
Who Should Attend: Horse farm owners and operators
Advanced Preparation: None
Program Level: Basic
Delivery Method: Group Internet Based

Refunds and Cancellations:
Because all Dean Dorton Allen Ford, PLLC events are complimentary to all clients, customers, prospects, referrals, and community members, there will be no cancellation fees or refunds if a registrant can no longer attend the event.

If you have questions about the event, complaints, and/or program policies please do not hesitate to contact Autumn Hines.

Dean Dorton is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

Related Events

Article Autumn Hines

Holiday shopping scams surge this time of year, especially those tied to package deliveries and “too good to be true” deals.

One increasingly common tactic is brushing. In these schemes, a threat actor sends an unsolicited package containing a random item along with a QR code. Scanning the code may lead to malware installation or prompt you to enter personal or account credentials.

Other common delivery-related scams include fake text messages claiming a package could not be delivered by USPS, UPS, or FedEx. These messages often contain malicious links designed to steal personal information.

How to protect yourself:

  • Never scan QR codes from unknown or unexpected sources
  • Avoid clicking delivery links in unsolicited texts or emails
  • Verify deliveries directly through official carrier websites or apps
  • Be skeptical of unusually large holiday discounts
  • Always check website URLs for misspellings or subtle typos, a common sign of fraudulent sites
  • Never enter login credentials on unfamiliar or untrusted websites

If something feels off, trust your instincts because it likely is.

Phishing & Impersonation Attempts

Phishing scams remain one of the most effective tools for cybercriminals, and they tend to spike during the holiday season. Common examples include emails claiming you’ve received a holiday bonus, payroll update, or e-gift card.

These messages may appear legitimate, but often originate from suspicious or slightly altered email domains.

Red flags to watch for:

  • Unexpected emails involving money, gifts, or urgent requests
  • Messages from unfamiliar or oddly formatted email addresses
  • Pressure to act quickly or click a link

When in doubt, don’t click. Verify requests through a trusted channel or contact the sender directly using known contact information.

Travel scams are especially common during peak holiday travel periods. Scammers may claim your flight has been canceled or require you to call a number immediately to confirm details.

Public Wi-Fi also poses risks. Cybercriminals can set up fake access points that look legitimate and trick travelers into connecting.

Best practices while traveling:

  • Only contact airlines through official apps or verified phone numbers
  • Avoid public Wi-Fi when possible; use mobile data or a personal hotspot
  • Connect only to official, trusted networks if Wi-Fi is necessary
  • Never use charging cables or USB ports at public kiosks, such as airports (a tactic known as “juice jacking”)

Account Takeovers & MFA Fatigue Attacks

Another growing threat is MFA fatigue, where attackers repeatedly send multi-factor authentication requests, hoping you’ll approve one out of frustration.

If you receive MFA prompts you didn’t initiate, do not approve them.

What to do instead:

  • Deny all unsolicited MFA requests
  • Immediately change your password
  • Use a password manager to generate and store strong, unique passwords
  • Avoid reusing passwords across accounts to prevent credential-stuffing attacks

Stay Cyber Aware This Holiday Season

The holidays are stressful enough without the added risk of cybercrime. By staying alert and following proactive cybersecurity best practices, you can significantly reduce your risk.

Trust your instincts, slow down before clicking or responding, and remember: legitimate organizations won’t pressure you into urgent action or request sensitive information unexpectedly.

Stay cyber aware, and enjoy a safer, more secure holiday season.

Article Autumn Hines

As Year-end approaches, horse and farm owners should evaluate how the One Big Beautiful Bill Act (OBBBA) affects both 2025 and years to come. Understanding these tax changes now can help you make informed decisions before December 31.

Understand the Impact of 100% Bonus Depreciation

OBBBA permanently extended 100% bonus depreciation for assets purchased and placed in service after January 19, 2025. For 2025:

  • Confirm the correct bonus depreciation percentage: either the enhanced 100% or the applicable percentage for assets purchased before January 20, 2025.
  • Keep in mind, many states do not follow this increased 100% bonus depreciation, so it is important to check your state’s rules to see if you receive a state tax benefit in addition to the Federal tax benefit.

Increasing Current Deductions

If your goal is to accelerate deductions this year, consider purchasing and placing in service (meaning the asset is ready for its intended use) qualifying assets by December 31, 2025.

Eligible assets, which must be used predominantly in the United States, include:

  • Equipment
  • Fencing
  • Land improvements
  • Barns
  • Most horse purchases (with some exceptions)

In addition to favorable depreciation rules, many horse and farm owners qualify to use the cash method of accounting when filing annual tax returns. If you use the cash method, consider prepaying expenses before year-end. However, ensure there is a valid non-tax reason for doing so, such as bulk or early payment discounts on feed, supplies, advertising, or access to a particular stallion.

This guidance assumes that you conduct your horse operations as a business and that you are either an active participant under material participation rules (details beyond the scope of this discussion) or have sufficient passive activity income to offset potential losses.

Charitable Giving Considerations Before 2026 Changes

For charitably inclined individuals, OBBBA permanently increased the adjusted gross income (AGI) limitation for cash gifts to public charities from 50% to 60%. However, new restrictions begin in 2026:

  • Donations below 0.5% of AGI will no longer be deductible for those who itemize.
  • Overall itemized deductions, including charitable contributions, will be reduced by a formula equal to 2/37 of the lesser of itemized deductions or income exceeding the 37% tax bracket. For example, a married couple with $1,000,000 of 2026 taxable income and $100,000 of itemized deductions would lose roughly $5,400 of their deductions due to this limit.  

So, when should you give?

  • If you itemize and plan to make charitable donations, 2025 may be a more favorable year to give, or even accelerate multi-year contributions, since these new limitations do not apply until 2026.
  • If you do not itemize, 2026 may be better, as OBBBA created a permanent $1,000 charitable deduction for taxpayers taking the standard deduction.

Expanded SALT Deduction Limits (2025-2029)

OBBBA also temporarily increased the itemized deduction limit for state, local, and real estate taxes from $10,000 to $40,000 for tax years 2025 through 2029. This higher limit phases down for incomes between $500,000 and $600,000, but does not reduce the state and local tax deduction below $10,000. If you operate a business, note that many states have adopted pass-through entity taxes, which can reduce ordinary business income and avoid the state tax cap, often resulting in significant federal tax savings.

Gifting and Estate Planning Strategies

Beyond income tax planning, consider estate planning strategies. One effective approach is lifetime gifting. Key basics:

  • 2025 annual gifts of $19,000 per recipient may be made to U.S. citizens free of gift and generation-skipping transfer (GST) tax.
  • The 2025 lifetime gift and GST exclusion is $13.99 million per person, permanently increased under OBBBA and indexed annually for inflation.

If the lifetime threshold is exceeded, gifts are taxed at 40%, and GST applies at an additional 40% for transfers to individuals more than 37.5 years younger than the donor (e.g., gifts to grandchildren).

Which Assets Make the Best Gifts?

Ideal assets for gifting are those expected to appreciate. In other words, beyond income tax planning, consider long-term estate planning opportunities.

Example: Gifting property worth $100,000 today that grows to $500,000 at death removes $500,000 from your estate while using only $100,000 of your exemption. Conversely, if the asset depreciates, you may waste exemption value.

Equine assets can be part of a gifting plan, though their future value is uncertain. If including horses, consider stallion shares from a profitable stallion (which generates cash flow) or broodmare interests rather than younger racing prospects. Remember, the recipient assumes responsibility for care and related expenses. Farms, typically held long-term, may offer better appreciation potential.

Using Pass-Through Entities to Maximize Gifting

To maximize gifting benefits, parents or grandparents often contribute assets to a pass-through entity (holding company). Non-controlling interests in the entity can then be gifted or sold at a discount to children or grandchildren (or their trusts), while the original owner retains voting control.

As the saying goes, nothing is certain except death and taxes. The first is unavoidable, but you can manage exposure to the second through effective planning, some of which is outlined above. If you have any questions, please do not hesitate to reach out to your Dean Dorton advisor.

Happy Holidays and best wishes for a successful year-end tax planning!