Equine Tax Fairness Act
This bill modifies the tax treatment of gains and losses from the sale of depreciable property used in a trade or business to eliminate horses from the definition of livestock (thus making the 24-month holding period requirement for livestock inapplicable to horses and allowing horses to be treated as capital assets subject to the existing 1-year holding period requirement for long-term capital gains).
The bill also makes permanent the 3-year recovery period for the depreciation of race horses.
To amend the Internal Revenue Code of 1986 to modify certain provisions 
                           related to horses.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Equine Tax Fairness Act''.

SEC. 2. REDUCTION OF HOLDING PERIOD TO 12 MONTHS FOR PURPOSES OF 
              DETERMINING WHETHER HORSES ARE SECTION 1231 ASSETS.

    (a) In General.--Section 1231(b)(3)(A) of the Internal Revenue Code 
of 1986 is amended by striking ``and horses''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2021.

SEC. 3. THREE-YEAR DEPRECIATION FOR RACE HORSES.

    (a) In General.--Section 168(e)(3)(A)(i) of the Internal Revenue 
Code of 1986 is amended to read as follows:
                            ``(i) any race horse,''.
    (b) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2021.
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Equine Tax Fairness Act
To amend the Internal Revenue Code of 1986 to modify certain provisions related to horses.
Equine Tax Fairness Act
Rep. Barr, Andy