Caveat: I know essentially nothing about depreciation other than what I read in Pub 946 as suggested by Critter#2. However, I experiment with TurboTax extensively.
It looks to me as though TurboTax has this all messed up. Using the desktop version of TurboTax to examine the underlying forms after using step-by-step mode to make an entry of a farm-business asset of a breeding or work horse 12 years old or less at the time it is placed in service results in the asset class set to 7 years and the recovery period set to 10 years, which seems to be backwards. Additionally, TurboTax's depreciation bar-graph appears to show a depreciation schedule based on the value that it has determined for asset class instead of the value for the recovery period, even though TurboTax uses the value that it has determined for the recovery period to determine the depreciation when preparing the actual tax return.
A workaround to get online TurboTax to use the proper 7-year recovery period with a horse that is an asset of a farm business is to enter it as Other property -> Other asset type and set the asset class to 7-year.
