Consulting (either in person or on the telephone) with your trainer, bloodstock agent, veterinarian, accountant, farm manager or any other persons assisting you in your business.
	Subscribing to and reading trade publications such as the Daily Racing Form, the Blood-Horse Magazine, etc.
	Reading/studying any other books, CD's, Internet sites, or other media related to the industry.
	Visiting the places where your horse or other horses are located.
	Attending horse sales.
	Attending the races.
	Attending any educational seminars.

It is advised to keep a business diary of these activities for each year. Today's smart phones can help with that using one of the various notes apps. The diary should be used to jot down your horse activities such as those described above. Additionally it may be used to record deductible expenses such as amounts spent on programs at the races, relevant phone calls, meals purchased for your advisors, travel (vehicle mileage and/or cost of airfare) to and from the track, farms, sales, etc. Get receipts for cash purchases if possible but perhaps the easiest way to keep track of all the miscellaneous expenses is a credit card used just for your horse business with the bill paid from your equine checking account.

Showing a Profit

You also need to plan your purchases, sales, and other details so that your horse business can fit into the "two out of seven years" rule for showing a profit. The very real problem is that owners, even when trying by every means they can, may not be able to show a net income in 1, let alone 2 out of 7 years, especially if the years in question are their first 7 years. This makes maintaining your IRS status as a business more difficult--but certainly not impossible. In simple terms, there will be a heavy burden of proof on you to show that your actions and expenditures are founded in a "good-faith" profit motive.

Your horse also is eligible to be depreciated like other types of business equipment. The schedules can be tricky and when the horse is "put into" service can drastically affect the number of years it takes to fully depreciate your horse. 

Please check with your accountant or tax advisor for help in setting up your horse business in a way that will keep you out of trouble with the IRS.

The American Horse Council offers publications that explain the tax law and the benefits of consulting with a professional tax accountant that specializes in the Thoroughbred industry. These also are advisable reading.