ABSTRACT: This study examines the thoroughbred auction market in order to assess the effect of taxes on asset prices. Yearlings purchased from 2002 to 2004 are eligible for bonus depreciation, and the price of the yearlings is predicted to be bid up during this period. The research design employs pricing models that have been published in economics and agri-business academic journals. These models control for such factors as yearling lineage, gender, and month foaled. Thoroughbreds are sold annually, and much of the data set is constructed using auction market sale catalog information. Consistent with the prediction, yearling prices are higher in the bonus period than in other periods. A control group of broodmares, which are not eligible for bonus depreciation, does not exhibit the same time period price differential.
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Research Article| March 01 2008
Taxes and Asset Prices: The Case of Thoroughbreds
Online ISSN: 1558-8017
Print ISSN: 0198-9073
American Accounting Association
Journal of the American Taxation Association (2008) 30 (1): 29–48.
Kimberly G. Key; Taxes and Asset Prices: The Case of Thoroughbreds. Journal of the American Taxation Association 1 March 2008; 30 (1): 29–48. https://doi.org/10.2308/jata.2008.30.1.29
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