Bed and Breakfast

[Black Bart]

My dearest comrade-in-alms Beauregard (practicing what I preach),

I take pen in hand and seat myself to confide to you that I felt my position with regard to this mercantile matter to be the true and just derivative of a pure heart and a conscientious mind. May I earnestly solicit your opinion vis-a-vis mine of yesterday and to most graciously suggest that you deign to reply at your earliest convenience (PDQ, dad-dang it--before jainen strangles me).

I beg to remain,

Your most humble and obedient servant, BB

[Armando Beaujolais]

the insensitive, tactless, inexcrupulous scoundrel, Armando Beaujolais.

Aw, I've been called worse.

I think I'd be fer givin' the One-Seven-Niner good buddy!

Actually I'm sort of a Yankee, but transplanted from around the middle. Dad was from Southern Illinois, like way south where they're still not sure they've logged all of the human settlements buried in the deep woods. I grew up in Springfield, halfway between the Devil's Kitchen and Chicago. Somebody was talking about being bilin...bilingua...bilieng....talking two languages. I'm 'bout as close at yer gonna' git exceptin' been somewhere else they talk somethin' differn't insteada Canadian.

[Black Bart]

Beau

my Pub. 17 quote said that T/P couldn't claim 179 for lodging equipment with the exception that it could be if it was used by transients (you say that's anybody staying under 30 days). Since probably 98% of all guests will stay only a day or two, maybe three or four, then, by your definition, almost everybody is a transient. And, if that's so, then what is the whole purpose of the first line in the pub reg saying owner can't take 179? If you are right, then the main body of the whole regulation doesn't apply to hardly anybody and is completely invalid except for the transient exception clause--therefore he could take 179 on the stuff unless you're wrong (perish the thought).

RSVP

Hmm, now I see why you and your peers are so blunt and direct. No other way to get through (if you wasn't so dang much smarter'n me, I'd really be frank about it). Anyhoo, can you puh-leeze answer the above question (try to focus)? Why do you think the reg is written as it is with the main emphasis being on not allowing the 179 rather than vice-versa?

[Black Bart]

Beau - P. S.

Hmm, now I see why you and your peers are so blunt and direct. No other way to get through (if you wasn't so dang much smarter'n me, I'd really be frank about it). Anyhoo, can you puh-leeze answer the above question (try to focus)? Why do you think the reg is written as it is with the main emphasis being on not allowing the 179 rather than vice-versa?

I know your position in the past has been that "Pub. 17 is not the code; it is merely IRS's interpretation of the code" and, as such, is presented in the way most favorable to them. Do you think that that played a part in their layout of and the presentation of the rule in order to perhaps confuse taxpayers and discourage the utilization of the S-179 deduction? While not a conspiracy buff, I've noticed in the past that some of their writings tend to de-emphasize some importants items while indirectly leading one away from the more important and cost-effective usable tools, thus making money for themselves. Your take on that? Thanks (if you'll give a good answer, I promise to publicly apologize for the "inexcrupulous scoundrel" comment; but that's as far as I can go--to retract the "tactless and insensitive" part would be a complete falsehood).

[Armando Beaujolais]

IRC section 179(d) says that “section 179 property…shall not include any property described in section 50(b)…”

IRC section 50(b)(1) “Property used for lodging…shall not apply to…property used by a hotel or motel in connection with the trade or business of furnishing lodging where the predominant portion of the accommodations is used by transients.”

I believe the sticking point is the question is rental vs. trade or business. They don’t want you taking a section 179 deduction on rental property. If you have residential rental property, no section 179. However, a hotel or motel (or bed and breakfast IMO) is considered a trade or business and therefore qualifies as an exception to the general rule.

Same deal with the passive loss rules. In general, any rental activity is considered a passive activity. An exception exists for certain short-term rentals (rental less than 30 days where significant personal services are provided, etc.). Once again, they’re separating rental activity from trade or business activity.

Perhaps the word “tranƒientƒ” harkens back to old English in the tax code. The word probably had a different connotation when the code was written. I think the confusing language is more the result of the dynamics of the tax code (politician blowhards decades ago trying to sound smart in writing tax law that's amended and discombobulated by present-day politician blowhards who are trying to sound smart but don't understand the tax code they're amending) than any intentional conspiracy.

Anyway, a bed and breakfast is not "furnishing lodging" for purposes of section 179 qualification.

[Black Bart]

End of this beat-to-death thread.

reakfast IMO)

discombobulated

Anyway, a bed and breakfast is not "furnishing lodging" for purposes of section 179 qualification.

Okay, good enough. But, I note you're sidin' in with jainen by usin' that word in dispute, "discombobulated." I still think it's not a real word and I intend to keep lookin' until I can prove it.

Ahem! TO WHOM IT MAY CONCERN: Armando Beaujolais is no longer considered to be an inexcrupulous scoundrel

How's that? I think we're even now.

[JON]

Bed and Breakfast

Yes, you can 179 eligible property in a Bed and Breakfast. Nothing new.