Racehorse Tax Parity Act

The Racehorse Tax Parity Act (HR 1112) changes tax rules for racehorses by reducing the required holding period from 24 months to 12 months for horses to qualify as "section 1231 assets" under federal tax law. This directly affects racehorse owners, breeders, and businesses that buy/sell horses, as it allows them to treat horses as business assets sooner for tax purposes. The bill amends the Internal Revenue Code to remove horses from the list of assets requiring a longer holding period, aligning their tax treatment with other livestock. The change applies to taxable years beginning after December 31, 2024.