Selling horses and taxes

General Questions
1

I was wondering how taxes work for horses you sell/buy towards the end of the year.

So say you buy a horse on December 1st and he’s made 200k that year but you haven’t seen a dime of it, are you still taxed on it? Or let’s say you sold that horse, do you still get taxed for a horse you no longer own?

2

I believe you only pay taxes on what the horse has done/raced with you. So if you sold a horse, you still have to pay taxes on the races run for you.

3

For a horse you bought during the year, you only pay taxes on what that horse earned while owned by you, not what it earned for it’s previous owner - that’s their responsibility.

For a horse you sold during the year, you only pay taxes on what that horse earned while owned by you, not what it earned for it’s new owner - that’s their responsibility. You do, however, have to pay a 5% tax on what you sold it for.