thanks to your outstanding training skills, technically you owe taxes on the
$3,000 profit you realized on the deal. "There is nothing you can buy or resell that you don't pay taxes on," Hickey says. "One point, however, is you don't pay capital gains if you owned the horse for less than six months."
Capital gains tax rates can change, and there's restructuring afoot for the entire tax code. But for now, the federal rates for 2001 taxes are 10 percent or 20 percent, depending on your tax bracket.
Talk to your accountant regarding local and state taxes.
In some states, you don't pay taxes on horse sales at all; others make you pony up only if you sell more than three horses within the tax year.