Bill Bourbonnais, EA wrote:

- quote -

It may just depend on facts and circumstances (F&C), howsomeEVER!

Ask three questions:

Ordinary?
necessary?
Reasonable?

ChEAr$$$,
Harlan Lunsford, EA n LA
11 Apr 2005
4 days and counting...... down.....\

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Bill Bourbonnais, EA wrote:

- quote -

First, see IRC 274 for limitations on deductions related to
"facilities." If the deal survives 274, then I suppose the
next question is to look at the nature of the timeshare
itself. If it involves an actual "fee title" ownership of
real property, then I suppose it would be depreciated in the
same manner as a hotel/motel (NON-residential?). However, if
it is a "right-to-use" arrangement or a "point plan," then I
suppose it would be depreciated or amortized over the period
of time for which use is permitted.

If your client thought he was going to get a deductible
"perk" out of this deal, I'll bet he ends up disappointed.

MTW

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I haven't been able to track anything down at irs.gov, CCH,
TaxAnalysts, etc. on this specific situation. Hopefully
someone on MTM can help out:

Taxpayer is sole shareholder of an S-corp. In 2004, as
President of the S-corp, he purchased a timeshare in the
name of and for use by the S-corp for employee rewards/perks
and entertaining clients.

If I understand correctly, use by employees of the
corporation will constitute taxable income to them and be
included on their W-2 at year-end.

However, at the corporate level, is this a depreciable
asset? If so, what is the depreciation method and class
life? The corp. won't be holding out as a rental (though it
may be rented occasionally), so intent is not as a rental.

Any help, advice, or suggested references are appreciated.

--
Bill Bourbonnais

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