Is this a tax “write-off?”

Please check with your tax advisor. For many investors, an investment loss is a 100% “write-off” against any personal income.

Do I have to sign a contract?

Yes. Each Tri Kappa Thoroughbred partnership is formed under an LLC in which you will need to sign off on an Operating Agreement. This is a high risk/high reward investment. Our agreements discuss in great detail the risks associated with the investment and all details of the applicable offering. Any prospectus or executive summary are for information purposes only.

What are the monthly expenses of owning a horse?

The actual amount varies from month to month. However, based on our experience, we can anticipate the monthly figures as listed below:

How much does it cost to enter a race?

Most races are free to enter. The only costs are jockey fees (avg. $75) and the pony to post (avg. $50). Some stakes races do have entry fees which are based on a percentage of the purse size.

How does Tri Kappa Thoroughbreds LLC earn money?

TKT partnerships will earn money two ways. First, any time a horse races, the partnership earns a percentage of the purse. Listed below is an estimated breakdown of the purse money for a $100,000 race:

The remaining 2% to be split between the rest of the horses.
Barn percentage is usually only paid when horses win.
Two, in addition to purse earnings, a partnership may earn additional funds if we were to sell a horse privately, in an auction/sale or if a horse is claimed.

When will the earnings be distributed?

Depending on the success of the horse, the most important thing is to maintain the Capital Account for future expenses. If the Capital Account is well capitalized the access will paid out to the membership.

Are there future expenditures needed?

Thoroughbred ownership is an expensive investment with that in mind, the idea of Partnerships/ Syndicates are to spread the costs of the ownership throughout the membership. In most cases the first year’s expenses are built into your original investment. However there are scenarios where further capital is needed to pay future expenses. In this case, the Managing Member asks for a Cash Call. The Cash Call is significantly less then the original investment.

Who names the horses?

Most horses are named democratically by the partnership. However, if we purchase a horse that has already raced, we cannot change the name.

Who is responsible for making the racing decisions?

All partners participate in the management of the LLC. As manager member, Jay Cummings and the applicable trainer are responsible for racing decisions.

What are the risks associated with this investment?

The risks, obligations, and information regarding any offering are as indicated in the LLC Operating Agreement of each offering. Please be advised the horse(s) being offered have either been purchased by TKT or are at a TKT option to purchase. For qualified and/or accredited investors interested in an offering, a copy of such agreements will be provided upon request.

What if I want out of the partnership?

This is spelled out in the LLC Operating Agreement. In most cases you are involved until the dissolution of the LLC unless you are able to find another party to meet your obligations at the approval of TKT management.

What if I can’t really afford to do this?

If you are asking that question, you should not get involved. This is a high risk/ high reward investment for qualified investors only.

Are the horses insured?

Some partnerships have the option to take out mortality insurance. Notwithstanding, any individual partner may insure his/ her interest with an equine insurance company. We are happy to provide referrals. Please remember, horses may only be insured in the event of an untimely death…not untimely injuries.

How will I know when the horses are running?

TKT prides itself on communication with our members. You will receive notices regarding works, races and general information on a regular basis. Most communications are done by email because of the group’s size but if you prefer a phone call that will not be a problem.

What if I want to bring a group of people to the track with me?

We have access to seats/ restaurants at most of our racing venues. Seating can be tight on “big racing” days and at Saratoga but we have had very few issues regarding this. We want all of your friends and family to attend the races and experience the thrill with you!

What kind of tax information will I receive?

Generally, by March of the calendar year, you will receive a K1 Tax Form from the partnership. Your tax accountant should know what to do with the K1 Form. If you need further assistance, our accountant will be happy to help.

Will I have fun?

Although, we can not guarantee our members will earn a profit, this will most likely be the most exciting investment you will ever make. There is no greater experience than screaming at the top of your lungs as you watch your very own thoroughbred in the stretch trying to win a race — just ask any of our current or past owners. 

More questions?

We encourage you to ask questions about Tri Kappa Thoroughbreds and horse racing in general. Becoming a partner in a Thoroughbred Racehorse should be the most exciting investment you will ever make.